The California electricity market has undergone a significant change with the implementation of NEM 3.0. The new rules, which took effect on January 1, 2020, have had a major impact on homeowners who generate their own solar power. Here’s what you need to know about NEM 3.0 and how it affects you as a California homeowner.
NEM stands for “Net Energy Metering,” and it refers to a billing system that credits solar panel owners for the excess electricity they generate and send back to the grid. NEM 3.0 is the third version of this system and includes a number of changes that have been implemented to make it more fair and sustainable.
One of the biggest changes in NEM 3.0 is the way excess solar generation is credited. Under the old system, homeowners were credited at the retail electricity rate, which was often much higher than the wholesale rate paid by utilities. This led to a subsidy for solar panel owners, as they were being paid more for their excess electricity than it was worth.
Under NEM 3.0, excess solar generation is credited at the wholesale rate, which is much lower than the retail rate. This means that solar panel owners will receive less money for their excess electricity. However, the new system also includes a “time-of-use” rate, which means that solar panel owners will be credited more for their excess electricity when demand for electricity is highest (during peak hours).
Another change in NEM 3.0 is the implementation of a “non-bypassable charge.” This is a fee that all electricity customers, including solar panel owners, must pay to support low-income assistance programs and renewable energy development.
Despite the changes in the way excess solar generation is credited, NEM 3.0 is still a net positive for the solar industry in California. The new time-of-use rate means that solar panel owners will be able to earn more for their excess electricity when it is most valuable, which will encourage more people to invest in solar panels.
In addition, the non-bypassable charge will help to fund important renewable energy programs, which will make solar energy more accessible and affordable for all Californians. Overall, NEM 3.0 is a step forward for the solar industry in California and will help to drive the adoption of clean, renewable energy in the state.
