The Clean Energy Alliance understands Net Energy Metering (NEM) customers want to know the differences between the current NEM 2.0 and the newly approved NEM 3.0. We have broken down the background and how it will affect current and prospective CEA customers.
On December 15, 2022, the California Public Utilities Commission (CPUC) approved NEM 3.0, a new policy that will replace NEM 2.0 beginning on April 13, 2023.
Net energy metering describes a billing system between utility providers and customers that generate their own power through solar or wind. Under net metering, self-generators earn credits for the excess electricity their system provides to the grid. Under NEM 2.0, net metering policies have a one-to-one offset, meaning the price of a kWh supplied to the grid is equal to the price of pulling a kWh off the grid. NEM 3.0 will change this price ratio.
Under NEM 2.0 customers can elect a rate schedule as long as it was time-of-use (TOU). NEM 3.0 will require customers to be on one specific TOU schedule that is determined by their energy provider, making NEM 3.0 more restrictive and limiting to customer choice.
Current NEM Customers
The most notable difference between NEM 2.0 and NEM 3.0 is the value of export rates–which will be much lower under NEM 3.0.
For existing NEM customers and customers with NEM 2.0 agreements in place by April 14, 2023, NEM 3.0 will have no impact. Existing NEM 2.0 customers will maintain their current rate of compensation and will remain on their current NEM tariff for 20 years after connecting to the grid.
Prospective NEM Customers
For new customers who install rooftop solar after April 14, 2023, the CPUC projects they should fully pay off their system within nine years, and will save roughly $100 on their electricity bill. NEM 3.0 will reduce compensation for net metering credits, lowering lifetime solar savings by approximately 60 percent. Under NEM 3.0, customers will not be able to replace or add capacity to their system while retaining their NEM 2.0 status.
Future CEA Customers
CEA’s Personal Impact option is for NEM customers who generate their own solar, wind, or other renewable power and want to offset their energy costs by selling their excess energy to CEA. Customers who are already enrolled in SDG&E’s Net Energy Metering Program will automatically become enrolled in CEA’s Personal Impact program upon enrolling with CEA.
Customers who are considering installing solar panels or wind turbines must first sign up for SDG&E’s NEM program; then they will be automatically enrolled in CEA’s Personal Impact option.
Personal Impact will remain CEA’s NEM option even after NEM 3.0 is rolled out on April 14, 2023.
To learn more about Net Energy Metering and what it means within CEA, visit: [CEA NEM page link]
For a full summary of the policy shift, please visit the CPUC’s website.