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  • Writer's pictureHaim Vagas

Solar PV Installation After NEM 3.0 in California

Updated: Jun 29, 2023



The California Public Utilities Commission (CPUC) has recently approved a new net metering (NEM) tariff, called NEM 3.0, which will go into effect on April 14, 2023. NEM 3.0 will replace the current NEM 2.0 tariff, which has been in place since 2017.


NEM is a billing arrangement that allows solar customers to receive credit for the excess electricity they generate and send back to the grid. Under NEM 2.0, solar customers received full retail credit for their excess electricity. However, under NEM 3.0, solar customers will receive a lower credit for their excess electricity.


The CPUC has made a number of changes to NEM 3.0 in an effort to make the program more equitable for all ratepayers. These changes include:


- A new monthly fixed charge for all solar customers.

- A lower credit for excess electricity exported to the grid.

- A new requirement for solar customers to sign up for a time-of-use (TOU) rate plan.


The CPUC estimates that the changes to NEM 3.0 will save ratepayers $8 billion over the next 20 years. However, some solar advocates argue that the changes will make solar less affordable for homeowners and businesses.


If you are considering installing solar panels in California, it is important to understand the changes that will be made under NEM 3.0. You should also talk to a solar installer to get an estimate of the cost of solar panels and the potential savings you could expect.


How the Changes to NEM 3.0 Will Affect You


The changes to NEM 3.0 will affect solar customers in a number of ways. Here is a look at some of the key changes:


1. Monthly fixed charge: All solar customers will be required to pay a monthly fixed charge, regardless of how much electricity they use. The fixed charge will be different for each utility company.


2. Lower credit for excess electricity: Solar customers will receive a lower credit for the excess electricity they export to the grid. The credit will be based on the utility company's avoided cost of electricity.


3. Time-of-use rate plan: Solar customers will be required to sign up for a TOU rate plan. TOU rate plans charge different rates for electricity depending on the time of day.


The changes to NEM 3.0 will likely have a significant impact on the cost of solar panels in California. The monthly fixed charge and the lower credit for excess electricity will make solar panels more expensive. However, the requirement to sign up for a TOU rate plan could actually save solar customers money, depending on how they use their electricity.


If you are considering installing solar panels in California, it is important to understand the changes that will be made under NEM 3.0. You should also talk to a solar installer to get an estimate of the cost of solar panels and the potential savings you could expect.


Is It Still a Good Investment?


Despite the changes to NEM 3.0, solar panels can still be a good investment for homeowners and businesses in California. Solar panels can save you money on your electric bill, and they can also increase the value of your home.


The amount of money you save on your electric bill will depend on a number of factors, including the size of your solar system, the amount of sunlight your home receives, and your utility rates. However, most solar customers in California will save money on their electric bills after installing solar panels.


The value of your home can also increase by installing solar panels. A study by Zillow found that homes with solar panels sell for an average of $15,000 more than homes without solar panels.


If you are considering installing solar panels, it is important to do your research and talk to a solar installer to get an estimate of the cost and savings. Solar panels can be a good investment for many homeowners and businesses in California.

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