Going solar is a no-brainer investment for most homeowners - not only will you gain independence of your power, but you will also increase your property value and receive the 30% federal tax credit on your system if you qualify. If you are a homeowner currently shopping for a solar system, chances are you have encountered the recent buzz surrounding NEM 3.0. There is a lot of information surrounding it, and we know it can be overwhelming to dissect the key points of the upcoming changes - the proposal is over 200 pages after all! Keep reading to learn more about what NEM 3.0 is, what changes will result from it, and most importantly, how it will impact you as a homeowner.
When you go solar, you are put on net metering (NEM) by your local utility company. Net metering means getting billed for the net difference between what your solar system produces, versus what your household consumes in any given billing cycle. If your overall system production exceeds the household consumption, then you will receive credits from your utility company. In the opposite scenario, you will owe the net difference.
The current net metering program is NEM 2.0. NEM 2.0 is very favorable in the sense that you receive solar credits at a 1:1 ratio with what the actual utility electricity rates are. This is a big reason why most of the systems we install pay themselves off in 5 years or less!
The CPUC (California Public Utilities Commission) oversees public utilities in California including Southern California Edison, SDG&E, and PG&E. Over the last year or so, there have been proposal drafts for NEM 3.0, which especially in the beginning, sparked a lot of frustration in the solar industry. Initially, the CPUC even wanted to impose a solar tax! Thanks to strong voices in our industry speaking up, initiating a petition to Gov. Newsom, and many rallies later, the updated NEM 3.0 proposal was voted on and approved on 12/15/2022. The outcome will be much better than we originally anticipated, but here is the nuance:
Rather than receiving solar credits at a 1:1 ratio in accordance with utility rates, under NEM 3.0, homeowners will be credited for 25% of the at-value cost of electricity. This will increase the return on your solar investment by an average of 3 years.
Under NEM 3.0, the workaround would be adding battery storage supplemental to your solar system - but this can pose a challenge when accounting for additional costs and a longer ROI. With this in mind, NEM 2.0 will ultimately maximize your returns.
Please note, NEM 3.0 will apply to SCE, PG&E, and SDG&E territory only beginning April 2023. As seen historically, we anticipate that other utility companies such as LADWP, BWP, GWP, and PWP to eventually follow suit.
NEM 3.0 will go into affect in April 2023. If you have solar now under NEM 1.0 or 2.0, there is a 20 year grandfathering clause, which means you will be unaffected by the forthcoming changes. Similarly, if you are considering adding solar, now may be the best time to do so. At OneSun, we will ensure to interconnect your system under NEM 2.0 if you decide to start your project before April 2023.
Regardless of the net metering terms, going solar will always be one of the best investments you can make for your home, as you will always receive your ROI on your solar installation. It just can take longer under NEM 3.0 - so why not make your return on investment the best it can be possibly be?
Contact us for more information or use our quote generator on our website to get your free, no-strings-attached proposal!
(877)-662-0116
info@onesunsolar.net
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