Learn what that means for California homeowners.

NEM3, or the Net Energy Metering 3, is a policy in California that determines how much solar energy users are compensated for excess energy they contribute back to the grid. Recently, the California Public Utilities Commission (CPUC) made the decision to reject a proposed solar tax, but also failed to adopt a reasonable NEM-3.

Utilities spent more than $40 million over the past three years fighting against NEM-3, outspending the solar industry by a ratio of 10 to 1. Despite the efforts of a coalition of over 600 organizations and the biggest outpouring of public support for a clean energy policy decision in California history, the CPUC made few changes to the NEM-3 proposal put forward in November. This decision will significantly impact the economic prospects of solar energy for schools, churches, businesses, and homes, with the value of solar exports dropping from 30 cents/kilowatt hour to just 5 cents for residential and 3 cents for commercial starting in April 2023.

The CPUC did agree to a reprieve for the apartment and farming markets by not modifying the VNEM and NEMA policies for now, but the overall impact on the solar industry in California will still be significant. In 2022, the state installed 30,000 batteries and 200,000 solar systems, and it is uncertain how energy storage will be able to fill the gap left by this decision.

Overall, the NEM-3 decision by the CPUC has been seen as a major setback for the solar energy industry in California and will have significant impacts on its economic prospects. The industry and its supporters will need to come together to figure out how to move forward and correct the policy mistakes made by the CPUC. Other states, such as Arizona, Nevada, and Hawaii, have also made similar mistakes with their clean energy policies, and it is important for all to learn from these mistakes and continue pushing for a clean energy future.

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