The California Public Utilities Commission (CUPC) released a new proposed decision about the future of Net Energy Metering (NEM), also known as NEM 3.0. The proposed changes will not impact current solar customers (enrolled in NEM 1.0 or 2.0) and the CPUC is expected to vote on the proposal on December 15, 2022.

As proposed, new solar customers will move to a system of net billing where the retail export compensation rate — what customers are paid for the energy they export back to the grid — is based on the value rooftop solar provides to the grid. The CPUC hopes this will incentivize customers to shift their energy use to the middle of the day and export electricity in the evening. This means many customers will want to pair a new solar system with battery storage. Recently, the state approved $900 million in incentives for residential customers who adopt solar plus battery storage, with 70% going to low-income customers.

In addition, the CPUC is proposing a “glide path” or bill credits for customers who install solar within the first five years of the new policy. The bill credits are designed to help with concerns about investment payback periods and ease customers into the new billing system.

There is still a lot to understand, and we won’t know the final impacts to new solar customers until the CPUC votes on the proposal. SJCE will keep customers informed of their options when it comes to installing solar and battery storage – including rebates and incentives to make it more affordable.