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NEM 2.0 vs. NEM 3.0 – What is the Difference?

NEM 2.0 is the current version of California’s net energy metering (NEM) program. It credits residential and commercial customers for the excess solar energy they generate and sends back to the grid. The terms of NEM 2.0 include the following:

  1. Customers received full retail credit for the excess energy they generated and sent back to the grid.
  2. No monthly minimum charge for NEM customers.
  3. No limits on the amount of excess energy that could be sent back to the grid.

In terms of energy price increases in California over the past ten years, the state has seen a steady rise in electricity prices. According to the U.S. Energy Information Administration, the average retail price of electricity in California has increased from approximately 20 cents per kilowatt-hour (kWh) in 2010 to approximately 28 cents/kWh in 2020. This increase, combined with the declining cost of solar technology, has made solar an increasingly attractive option for homeowners looking to save money on their electricity bills.

NEM 2.0 Expires in April of this year.

The key changes coming in NEM 3.0 include the following:

  1. Time-of-Use (TOU) rates will be mandatory for all new solar customers.
  2. A new monthly minimum charge will be implemented for all NEM customers.
  3. Solar export limits will be reduced, limiting the amount of excess energy that can be sent back to the grid.

As for the cost-effectiveness of solar in California, it’s still a good time to go solar, but it will be even better if you can get in under NEM 2.0. The ROI will be much greater.

Solar panel prices have decreased over the years, and with financing options available, it can be affordable for homeowners. You can finance your solar system for the same cost as your monthly electrical bill, and after a few years, your payments will stop, allowing you to own your system and save money on your electricity bill.

Call us today at 562-852-5626 to see how going solar makes sense for you.

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