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What is Net Energy Metering (NEM 3.0) of California?

California is updating its Net Energy Metering (NEM) policy to version 3.0, which is aimed at promoting the adoption of solar energy systems and battery storage by incentivizing homeowners who generate their own clean energy. NEM 3.0 builds on the previous versions of the program, which have been successful in encouraging homeowners to adopt solar power by offering financial credits on their electric bills for any surplus energy fed back to their utility.

The new policy is expected to be more flexible and responsive to the changing needs of the grid and to provide more benefits to homeowners. One of the key changes in NEM 3.0 is the introduction of time-of-use (TOU) rates, which will provide different reimbursement rates for surplus energy depending on the time of day. This will incentivize homeowners to generate and export energy during times when it is most valuable to the grid, such as during peak demand hours. Additionally, the new policy will increase the amount of energy that homeowners can export back to the grid, allowing them to recoup more of their investment in solar systems.

Existing solar customers who have installed their systems under NEM 1.0 or NEM 2.0 will not be affected by the update, and will continue to receive the benefits of the previous programs. New customers will have the opportunity to apply for NEM 2.0 rates and regulations, provided they submit their application by April 13, 2023. The new policy will not include any fixed charges or additional fees specific to NEM customers.

Furthermore, NEM 3.0 also encourages the use of battery storage and other forms of energy storage, which will help to smooth out the supply and demand of energy on the grid and ensure a more reliable and resilient power system. This will be especially important as the state continues to pursue its ambitious goals for decarbonization and the electrification of transportation and buildings.

Overall, NEM 3.0 is a positive step forward for solar energy in California, as it will help to promote the adoption of clean energy.