CPUC Passes NEM 3

NEM 3 Proposal Moves Forward

The California Public Utilities Commission (CPUC) recently voted on and passed Net Energy Metering (NEM) 3.

What does NEM 3 entail?

The California Public Utilities Commission (CPUC) voted 5-0 to pass NEM 3. Although the CPUC did not move forward with the proposed monthly solar tax, NEM 3 is still unreasonable and hurtful to the solar industry and its customers. Originally NEM 3 was simply meant to be a continuation of Net Energy Metering giving credit to solar consumers for sending energy back to the energy grid. It was not meant to include newly levied charges or subsequent changes to the current net energy metering agreements. Though it did allow for future revisions to the management of solar energy storage. Unfortunately, the NEM 3 approved by the California Public Utilities Commission brings detrimental changes to rates, credits, the commercial solar market, and the future of rooftop solar in California.

Positives of NEM 3

• No new or additional tax based on solar size or production
• NEM 2 will keep VNEM and NEMA for 9 years
• No retroactive changes for NEM 1 and 2 customers
• Changes to the definition of lower-income customers (meaning single-family residents in certain tribal lands and underprivileged communities) under “CARE customers”

Negatives of NEM 3

• In order to be grandfathered into NEM 2 (and be eligible for its benefits) solar systems must submit completed utility applications before the April 15, 2023 deadline, and also be built by 2026
• The recent additions have no true target or “glide path” to lead NEM 3 toward a successful or reasonable outcome
• While other utilities are offering small export adders, SDG&E has declined to offer any adders
• The rate of export credits drop down 75 percent on average from prior NEM 2 agreements, drastically increasing the payback period
• There are over 500 different export values for every hour in each month. This, combined with instantaneous netting, will make it incredibly difficult for customers to track their investment
• Customers are required to be on electrification rates that have minimum monthly charges of $14-16
• Most systems will require a paired battery to get the most savings, however, batteries are still incredibly expensive

Many complex rate variables don’t make sense for the future of solar energy growth throughout the United States of America. The NEM 3 outcome could have been much worse but the approved version is truly not acceptable. Although California has been a national leader in the push for renewable energy, this decision is a major deterrent to the growth of the solar industry.

How to rally against NEM 3

What can you do to help? Please sign a public comment to Governor Newsom and to the California Public Utilities Commission (CPUC). Also share solar news and spread this important information to family, friends, and others. A good resource geared towards industry professionals to follow is the California Solar & Storage Association (CALSSA) whose mission is to “promote the widespread deployment of smart, local, clean energy technologies while supporting a wide variety of businesses that every day build a better energy future in urban and rural communities and neighborhoods throughout the state through policy development, advocacy, education, networking, and business services.” Another good resource geared towards solar consumers is the Solar Rights Alliance (SRA), a statewide nonprofit association of California solar users (and solar supporters who don’t have solar yet). The Solar Rights Alliance believes, “you have the right to make energy from the sun on your property without unreasonable interference by the utility… that your solar energy is a valuable community resource, and you should be credited as such when you share it with the grid.” The SRA provides alerts on important solar information and effective action plans. Both the SRA and CALSSA are credible sources of information and important advocates for solar in California.