California has always been a state known for its forward-thinking ideas and initiatives. One such initiative is the Net Energy Metering (NEM) program, which allows homeowners with solar-powered systems to save money by selling excess energy back to the grid. However, with the introduction of NEM 3.0 on the horizon, there’s increasing confusion about the different iterations of the program, and what it means for solar-powered homeowners. At Sunlogix Energy, we believe in keeping our customers informed, and this blog post will detail everything you need to know about NEM 2.0 and NEM 3.0.
What is the Difference Between NEM 1.0, NEM 2.0 and NEM 3.0?
NEM 1.0, the original iteration of the program, was introduced in 1996 and aimed at encouraging the adoption of solar energy in homes. Under the program, electricity companies credit solar-powered households for the energy they produce that’s returned back to the grid. This credit appears as a reduction in their electricity bill, making the program a cost-effective solution for households to go solar.
In January 2016, NEM 2.0 came into effect, which allowed homeowners to sell any excess energy produced back to their utility company at the same retail rate. However, after certain thresholds were met, homeowners were also subject to additional fees, which meant that they had to install solar panels in proportion with their annual electricity needs.
NEM 3.0, which is expected to come into effect on April 13, 2023, removes most of the fees and introduces a more nuanced system of compensation for excess energy produced. Under NEM 3.0, three types of customers will be eligible: those who wish to have a system and use electricity from their utility company are “Net Metering Customers,” those who generate more electricity than they use are “Non-Export NEM customers,” and those who use no electricity from the grid are “Off-Grid.”
What Will Happen When NEM 2.0 Becomes NEM 3.0?
The new program means that those who sign up for NEM 3.0 will have their rooftop solar panels interconnected differently, thus mitigating the number of fees associated with interconnection. However, customers who are currently under NEM 2.0 can continue to access the tariff plan for the next 20 years. Furthermore, those who enroll in NEM 2.0 before it moves to NEM 3.0 and meet the eligibility criteria, can receive those benefits for the next 20 years, according to California regulations.
How Can Homeowners Retain Their NEM 2.0 Benefits for 20 Years?
Those who wish to keep their NEM 2.0 plan for the next 20 years can do so in two ways. Firstly, they can ensure their system is interconnected before the end of 2022–this will allow the system to receive the benefits of NEM 2.0 until 2042. You can fill out your Interconnection Application online. Secondly, homeowners can replace their 2.0 system with a new 2.0 system and meet certain fleet size and installation conditions. This method allows homeowners to continue receiving NEM 2.0 benefits.
How Can You Leverage NEM 3.0?
The first step to leverage NEM 3.0 is to install a solar system. If you already have one, you may want to consider adding more panels to your system to generate more energy. The more energy you generate, the more credits you receive. Additionally, you can shift your energy usage to when the sun is shining, which will help you avoid using electricity at peak hours.
Furthermore, you can participate in a community solar project. These projects allow you to invest in a solar farm that generates energy and receive credits for the energy produced. This option is perfect for renters or homeowners who don’t have the resources to install solar panels on their roofs.
Contact Sunlogix Energy Today for Help!
Sunlogix Energy is here to offer expert advice and help homeowners navigate this complex transition from NEM 2.0 to NEM 3.0. By generating more energy, shifting your energy usage, or participating in a community solar project, you can leverage NEM 3.0 to reduce your electric bill and save money. If you have any questions about NEM 3.0 or how to make the most of it, feel free to contact us at Sunlogix Energy. We’re always ready to help our customers get the most out of their solar investment.