It’s been just over a year since NEM 3.0 (also commonly referred to as Net Billing) took effect on April 15, 2023 after it was approved by unanimous vote by the California Public Utilities Commission (CPUC), but many Californians are still in the dark as to what NEM 3.0 actually is, or what it means for the solar industry throughout the state. So what is NEM 3.0 and is it worth looking into? We’ll be exploring the many aspects of this solar program so you can be more informed if you’re considering going solar, or already have an existing solar system.
But First, What is NEM 3.0?
“NEM,” Net Energy Metering, and it is the third iteration of a utility program in California in which owners of rooftop solar installations at their homes or businesses are eligible to receive credits on their utility bills by routing the excess energy they don’t use back to the grid. The idea is to offset the cost of electricity and save participants money by reducing utility bills while also powering their home or business via their solar panels. Since the application of the two previous versions of the program, there have been several revisions and NEM 3.0 now works a little differently than its predecessors.
What Makes NEM 3.0 Different From Earlier Versions?
There are several notable details that differentiate this newest version of Net Energy Metering from its earlier variants and how they affect new and existing solar customers. An important few changes include:
Reduced Export Rates – Californian solar home and business owners receive significantly less money back from their utility company with the modified rate plans for NEM 3.0 as they had with NEM 2.0, with a drastic 75% reduction. That takes an average of 30 cents per kilowatt-hour (kWh) available with 2.0 down to about 8 cents per kWh. Export rates are no longer based on retail pricing, but instead on “Avoided Cost,” which calculates the pricing on the amount the utility company avoided paying, along with Time-of-Use (TOU) billing, which varies down month, day, and hour, with companies charging more for any peak-hour usage.
Longer Payback Period – Along with reduced export rates, the period in which participants are able to payback their systems is extended with NEM 3.0 with a 9-year payoff period, increased from 4 to 7 years under NEM 2.0. However, while the payback period takes longer, an average of 10% return rate ensures participants are still saving a notable amount of money in the long run, not to mention that the solar panels themselves will still continue working and benefiting the property owner for roughly 25 years.
Hourly Calculated Rates Replaced By Rapid Cycling – NEM 3.0 has enacted rapid cycling, also known as “rapid netting,” or “instantaneous netting.” While NEM 2.0’s electricity rates had been calculated by the participant’s generation and usage hourly, NEM 3.0’s process now measures the meter’s electricity usage in real-time. The more complex calculations this system requires makes this change less financially beneficial for solar customers.
Battery Storage Benefits Solar Customers Even More – With these changes to Net Energy Metering, it is more beneficial than ever to invest in battery storage while enrolled in NEM 3.0. Customers have the ability to add battery storage later if they did not originally have it when enrolling. Battery storage with solar has many great advantages that will help you to work smarter with your energy consumption while continuing to save money over time.
So Is It Still Worth Enrolling in NEM 3.0?
The simple answer is, yes! While NEM 3.0 may not be as attractive to solar customers as it had been with the 1.0 and 2.0 iterations, there is still a lot to gain from enrolling into the program. At the end of the day, solar is a great way to mitigate your utility bills, and NEM 3.0 will add a great value to your solar system. Participants will still end up saving a significant amount long-term, and with solar batteries, the benefits will keep on coming.
Have questions about solar batteries and how to get started? BigBattery’s got you covered. Feel free to contact us with any of your questions about our products or services.
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Frequently Asked Questions
How long do LiFePO4 batteries last?
A quality LiFePO4 battery can commonly deliver 4,000 or more charge cycles, often roughly 10 years or longer under the right conditions. Depth of discharge, temperature, charge settings, storage habits, and the BMS all affect the result.
How many years is 4,000 cycles?
One full cycle per day is about 11 years. Three cycles per week is more than 25 years on paper, though calendar aging becomes the limit first.
What happens at the end of a LiFePO4 battery's life?
It does not suddenly stop. It loses capacity gradually. A battery rated for 4,000 cycles may be specified to keep around 80% of its original capacity at that point.
Does temperature affect LiFePO4 battery life?
Yes. High heat speeds aging, and charging below freezing can damage cells unless the battery has low-temperature protection or self-heating.
How long does a lithium battery last in an RV?
Many years, when charging sources are configured correctly and the battery is protected from freezing charge conditions. Annual cycles are often fewer than in a daily solar system, but conditions vary more.
How should I store a lithium battery?
Store it at a partial state of charge in a clean, dry, moderate-temperature location. Disconnect parasitic loads and check it periodically per the manufacturer's guidance.
