In April of 2023 NEM 3.0 took effect in California. NEM 3.0 applies to the three main IOUs; PG&E, SDG&E, and SCE. Prior to NEM 3.0 these utility companies followed NEM 2.0, under NEM 2.0 solar homeowners were credited the full retail value of each kWh of electricity they sent back to the grid, this is what was considered a 1 for 1 credit. However, NEM 3.0 has brought a 75% reduction of electricity export rates and is based on the avoided cost calculator which means utility companies aren’t paying solar owners the regular retail rate for their excess solar.
For example, let’s say that under NEM 2.0, a homeowner was credited $0.30 per kWh for the excess electricity they exported to the grid. Under NEM 3.0, that same homeowner would only receive about $0.08 per kWh.
It is important to point out that NEM 3.0 only effects California’s main IOUs because they are regulated by the CPUC. This means that some of California’s municipal utility companies may still be following NEM 2.0 policies due to the fact that they are publicly owned and therefore do not have to adhere to the CPUC’s decisions. If you are a California homeowner looking into getting solar and are serviced by a Publicly Owned Utility, get in contact with them to see what their net metering policies are.