Urgent Changes to Net Energy Metering Coming to California

Urgent Changes to Net Energy Metering for California Rooftop Solar



California — If you have been looking for the right time to go solar, now is the time. After early next year, people who switch to solar will not enjoy the same perks that they do now.

People adopting solar later rather than now will see significantly longer pay-back periods. This is all due to the investor-owned utilities (IOU) proposal to the California Public Utilities Commission to move from the current NEM 2.0 to NEM 3.0.

Changes were proposed in May 2020 and will be taking effect soon.

What is NEM?

Net Energy Metering, NEM for short, is a set of rules which govern how utilities handle solar power. There has been a lot of conversations surrounding the changes coming to these rules.

Early this month, the California Solar + Storage Association (CALSSA), announced the upcoming changes to net energy metering and the eligibility rules for NEM 2.0.

What are the differences between NEM and NEM 2.0?

There are three different kinds of NEM depending on the time of submission.

  • NEM – one-for-one credit (ended 2016)
  • NEM Version 2.0 – you will have to sell electricity to the utility for approximately 2 cents kWh less than the price they pay for power from the utility.
  • NEM Version 3.0 – the further devaluation of export credits


Net metering allows the electricity solar customer to get credit from the utility for the customer’s exports to the grid. When your solar system produces more than you consume, the excess electricity goes to your neighbors. In return, the utility gives a credit to the generating customer for that energy. At the end of the month, your bill gets credited against the cost of electricity the consumer draws from the grid.

How do these changes affect you?

Before 2016, net metering provided a one-for-one credit. In 2016 the California Public Utilities Commission (CPUC) made some changes where under NET 2.0, costumers are assessed “non-bypassable charges” on exported energy.

This means that customers now sell power to the utility for approximately 2 cents kWh less than the price they pay for power from the utility.

Fast forward to now, the CPUC is developing NEM 3.0. The changes will continue to devaluate the export credits and could also result in new monthly fees for solar customers.

These changes affect what percentage of your monthly energy bill you pay to the utility department.

You still have time to be eligible to participate in NEM 2.0, contact us to learn how.