Is Solar Still Worth It In California with NEM 3.0?

Residential Solar from Excite Energy California solar installer

As homeowners in California consider the shift from NEM 2.0 to NEM 3.0, it's crucial to understand the evolving dynamics of solar energy and how these changes impact your investment. Here are some key aspects of NEM 3.0, the implications for solar payback periods, and strategies to optimize savings including the role of energy storage systems.

Understanding NEM 3.0

Net Energy Metering (NEM) allows homeowners to receive credits for surplus electricity generated by their solar panels. However, the recent implementation of NEM 3.0 by the California Public Utilities Commission (CPUC) has altered the compensation structure. Instead of the previous one-to-one net metering, NEM 3.0 introduces net billing, with credits based on "avoided cost" rates, resulting in a substantial 75 percent decrease in the value of net metering credits.

Impact on Solar Payback Periods

Initial projections suggested an extended payback period under NEM 3.0, especially for standalone solar systems. However, the reality has been different.

The combination of increased electricity rates and decreasing solar prices in California means homeowners are getting to a cash positive investment quicker than expected.

Talk with one of our solar and battery system experts to find out how quickly you can save on your utility bills.

Importance of Solar Batteries

Because of NEM 3.0, it’s much more valuable to pair solar panel systems with batteries. The payback period for a solar-plus-storage installation is now faster than that of a solar-only setup. We recommend homeowners install battery storage systems as part of your solar installation to maximize savings.

Yes! Solar Is Worth It!

Purchasing a battery storage system alongside your solar panels, minimizing power usage during peak hours, and enrolling sooner rather than later are the best ways to take advantage of solar in California.


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