Heads Up Solar Power Users : NEM3 Is Almost Here and There Will Be Big Changes

The CPUC put out its revised Net Energy Metering plan (referred to as “NEM 3.0”) on Dec. 13th 2021 and plans a final vote to adopt the plan on January 27, 2022. There are substantial changes in this new plan with respect to NEM 1 and NEM 2 that those of you considering or already with roof top solar installations need to be aware of. These changes could significantly affect the economics of solar rooftop installations in California

The key new item that NEM 3 introduces is Net Billing Tariff which does the following according to the CPUC NEM 3 website:

  • Pays Net Billing customers for the electricity they export to the grid
    • based on its value, determined by the avoided cost to the utility of buying clean energy elsewhere
    • The amount paid for your electricity will vary hour to hour, depending what time of the day that you send electricity to the grid
    • You could see a reduction in income of 20-30 cents per KWh per California Solar & Storage Association
  • Charges Net Billing customers for the electricity they receive from the grid
    • based on high differential time-of-use tariffs
    • creates more benefit for customers who install storage and incentivizing them to store solar energy and shift exports later in the day
  • Creates a Grid Participation Charge based on the size of the solar system
    • This will be $8 per kW of installed solar capacity on your home
    •  Depending on the size of your installation, this could be a considerable fixed monthly charge
    • Low Income households will be exempt from this charge
  • Provides a Market Transition Credit
    • Ensures that customers can pay back the cost of a new solar plus storage energy system in less than 10 years
    • The credit will phase out for new customers over four years

More analysis of the impact of this decision can be found in this article from Solar Power World.

Contact the CPUC to voice your concerns and comments on NEM3 and virtually attend January 27 2022 Voting Meeting