Everything You Need to Know About NEM 3.0


January 14, 2022 | 2min read

On December 13, 2021, the California Public Utilities Commission (CPUC) published its proposed decision to replace the state’s solar net energy metering (NEM) program. The new proposal, NEM 3.0, would replace NEM 2.0 and is being called a “Net Billing tariff”. If it passes as is, it could slow down California’s thriving rooftop solar market, potentially jeopardizing many good-paying solar jobs. The NEM 3.0 proposal could also put solar out of reach for low-income families and slow progress toward meeting California’s clean energy goals. 

What is the CPUC?

The CPUC is a state agency including five Commissioners that are appointed by the Governor.  These commissioners play an important role in regulating electric utility companies, including setting the rates that they can charge. This includes setting the rates for solar customers, which impacts the value that solar customers receive from investing in a home solar energy system.

How Will NEM 3.0 Affect Solar Customers?

The proposed changes in NEM 3.0 include new residential monthly solar fees, reduced rates for solar energy exported to the grid, and retroactive changes for existing NEM 1.0 and NEM 2.0 customers. As written, the Net Billing tariff proposal would: 

  • Dramatically reduce export rates based on utility avoided costs (from 20¢ – 30¢/kWh to 4¢ – 5¢/kWh) 
  • Force NEM customers to move to an electrification rate, which will include fixed charges
  • A solar tax, or “Grid Participation Charge”, of $8.00/kW. On a typical 7 kW system, this would result in a $56/month charge, almost $700 a year
  • The current 20-year eligibility period for NEM 1.0 and NEM 2.0 is reduced to 15 years for non-low-income residential customers. 

The full CPUC proposed decision can be found here. While this decision will only impact residential solar in California, the final vote will likely impact debates in other states. 

What Does This Mean for Freedom Forever?

Without major changes, NEM 3.0 would increase the cost of going solar on certain projects, curbing California’s clean energy leadership while having a great impact on the industry. Thankfully, given our size and industry-leading approach to serving the residential solar market, Freedom Forever is better positioned than any other California solar contractor to succeed, regardless of the final decision. However, we believe that we must stand with our industry partners to fight the CPUC’s flawed proposal and the utilities’ profit grab at the expense of California solar workers. 

What Can You Do to Help?

The CPUC is scheduled to make a final decision on NEM 3.0 on February 11, 2022, with the new tariff becoming effective four months after final approval (May 28, 2022). We need your help to ensure this proposal doesn’t pass in its current form. Continue to make your voices heard and address the CPUC directly at their Public Hearing on January 27th! In addition, by emailing Governor Gavin Newsom and signing this petition, you can help save residential solar and keep California on track to reaching its clean energy goals.

Ready to go solar? Call us at 800-685-1850 or click below to get started.