Net Energy Metering 3.0 the Solar Billing Program
What is Net Energy Metering?
As more California Homeowners look for ways to reduce their energy bills and become energy independent, solar has been a popular solution - raising the question, should you generate your power through solar?
Net Energy Metering (NEM) is a billing system that allows homeowners with solar panels to send excess energy back to the grid and earn credits.
These credits offset the electricity they use when the sun isn’t shining - like at night or on cloudy days.
How Has Net Energy Metering Changed?
Net Energy Metering made solar very appealing because homeowners were initially credited full retail value of the electricity they exported.
Over time, utility companies and state regulators argued that too many solar customers weren’t paying their fair share for grid maintenance, which led to higher bills for non-solar customers.
Reforms to the program began and a key piece of legislation AB 327, required the California Public Utilities Commission (CPUC) to create a new version of NEM.
That began a slow but steady shift towards less generous prices.
NEM 1.0
Full retail rate for excess energy
No mandatory Time-of-Use (TOU) Rates
Made solar extremely attractive
NEM 2.0
Still gave close to full retail credit
Introduced mandatory TOU rates meaning your energy is worth more or less depending on the time of the day
Added utility fees and charges
NEM 3.0
Biggest Change: export credits are no longer tiered to retail rates
Now based on “avoided costs” meaning export credits dropped
Time Of Use rates remain, but the value of the solar depends more on when and how you use or store your energy
Encourages battery storage to maximize savings
Homeowners who installed solar before April 15, 2024 remain under NEM 1.0 or NEM 2.0.
Net Energy Metering 3.0
Net Energy Metering 3.0 was introduced because utility companies argued that the retail-rate net metering created a cost shift - where non-solar customers weren’t paying paying more for grid upkeep while solar users paid less and still had access to the grid.
To balance the playing field, NEM 3.0 aimed to:
Reduce financial burden on non-solar customers
Encourage solar + battery storage instead of just panels
Align solar compensation more closely with market value.
The goal was to make things “more fore” - while continuing to promote clean energy.
Is Solar Still Worth It Under Net Energy Metering 3.0
The short answer is: YES - but it depends on how you go solar.
Here’s what changed and what still works:
Batteries let you store excess power and use it during peak times (when electricity is most expensive), instead of sending it to the grid for a low credit.
You live in areas with high utility rates.
You get predictable payments and know exactly what your bill is, how much power you use, how much that power costs - ultimately allowing you to have the peace of mind that you can use the right amount of power without the burden of fluctuating rates.
⏰ Find Out If
Net Energy Metering
Can Lower Your Energy Bills. ⚡️
Energy Advisor - Brighter Grid
We partner with homeowners to bridge the connection with the best installers, lenders, solar companies and California utilities to facilitate the transition to clean energy.
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