Before diving into the differences between NEM 2.0 and NEM 3.0, let's take a moment to familiarize ourselves with the fundamental aspects of net metering regulations.
Full Retail: The Full Retail net metering plan ensures that you are paid the same amount per unit of solar power as your utility provider charges for electricity, making it the most profitable option among the options mentioned here.
Time of Use (ToU): With this plan, utility rates are higher during peak consumption hours, resulting in varying compensation rates based on the time of day.
The Avoided Cost model allows the utility to reimburse you for the savings it achieved by using solar power, with rates that are much lower than regular utility prices.
California's NEM laws have evolved over time, shifting from full retail to Time-of-Use (ToU) and Avoided Cost models.
Breaking it down: What has changed?
On April 15, 2023, the California Public Utilities Commission (CPUC) implemented NEM 3.0 after extensive discussions and considerations. This new policy will be applicable to all solar users connected to the grid who install their solar panels on or after that specific date.
Why? By approving these modifications, the CPUC asserts that it is guaranteeing a fair allocation of electricity produced by utility companies and creating stronger and more reliable power networks.
It is yet to be determined if CPUC will accomplish this objective, but the initial effects of NEM 3.0 are causing significant disruptions.
Solar batteries come to the rescue.
Now that you are up to date on what happened to the California solar industry, we will explain how adding a battery differs between the different NEM tariffs.
Adding a battery under Nem-2:
Battery storage under NEM 2.0 enables customers on time-of-use (TOU) rate plans to store surplus electricity generated by their panels during daylight hours, when electricity usage and resale rates are low. This stored energy can then be utilized in the evening when rates are considerably higher.
Another great example of a battery under the NEM-2 tariff: For those days when it's going to be almost 90 degrees and there's a planned 12-hour outage.
Ideal for: Back-Up storage and Power Outages.
Adding a battery under Nem-3
You can choose to become grid-independent by adding an energy storage system to your solar setup. And what better choice than a solar battery? By investing in a solar battery, you can ensure meeting your household energy needs without being dependent on the unpredictable net metering plans in California or any other state.
The inclusion of batteries in your solar system can enhance the overall return on investment (ROI) for your total costs.
Ideal for: return on investment
The takeaway.
Will I be affected by NEM 3.0 if add more power?
Another important nugget of the NEM 3.0 decision is that NEM 2.0 can add battery storage in the future and retain their NEM 2.0 status.
There are two common scenarios where this comes into play:
If you currently have a solar system in California, you won’t be transitioned into NEM 3.0 if you add battery storage after April 14, 2023
If you go solar under NEM 2.0 before the April 14, 2023 deadline, adding battery storage later will not change your NEM 2.0 status
There are several advantages to pairing solar and battery in California, so being able to add battery and remain in NEM 2.0 is a big win for Californians. To read more about additional power, you can read our previous blog here.