NEM 3.0 101

JP Electric & Solar has prided ourselves on our ability to confidently deliver honest solutions to homeowners since 1978. We know Valley homeowners rely on us for answers so we made sure to stay ahead of the game and come prepared.

NEM 3.0 101

JP Electric & Solar has prided ourselves on our ability to confidently deliver honest solutions to homeowners since 1978. We know Valley homeowners rely on us for answers so we made sure to stay ahead of the game and come prepared.

What’s changed?

To help meet California’s aggressive renewable energy goals—the state has updated their solar policy to better support the use of battery storage.

Reduced compensation for solar production

The rate at which solar owners are reimbursed for the excess electricity they supply to the grid is the most significant change between NEM 2.0 and NEM 3.0.

Under most net metering rules, solar customers receive credit for the total retail value of each kWh of electricity they export. With NEM 2.0, this was a one-to-one trade, meaning each kWh you export (push onto the grid) counterbalances a kWh you import.

Under the new rules of NEM 3.0, the credit value of solar has been decreased by roughly 80%, from 24 cents/kWh to 5 cents/kWh.

Introduction of the avoided cost calculator

The value of solar exports are no longer determined by retail prices under NEM 3.0. The Avoided Cost Calculator is used to determine export prices, which change hourly depending on Time of Use rates.

No new solar taxes

One new positive change to this revised NEM 3.0 proposal is that there will be no new solar taxes. Previously, it was anticipated that these taxes would raise solar owners’ utility rates by about $60 per month.

Do I need a battery?

Under NEM 3.0 rules, 100% solar production offset no longer helps homeowners achieve energy savings.

The coupling of solar and battery storage is needed because of the reduced rates for solar production. It is not possible to capture all available solar production without battery storage.


Solar savings are still very possible under NEM 3.0 rules. With the right balance of solar and battery storage, payback timelines can be as short as 10 years (up from 7.5 years on average under NEM 2.0 rules).

The solution: store and save.

Without battery storage, solar customers will experience diminishing returns on the solar production they send to the grid during the peak months of sunlight (June, July, August). A solar system must be properly sized and balanced with storage to ensure excess power in Spring and high-production months doesn’t escape to the grid at disconnected values.


Learn about how solar savings are possible under NEM 3.0 rules.

Am I too late to save money?

No—solar savings are still possible under NEM 3.0 rules. Solar Negotiators’ Powershift® Program is about solar savings, smart battery protection, and grid independence. We’re helping empower homeowners to minimize the amount of energy they pull from the utility grid by combining the perfect amount of solar and battery storage.

Maximize use of solar power

During the day, when the sun is at its highest, your solar panels will produce enough energy to power your home. Any excess energy produced should be stored in your battery instead of being pushed back to the utility grid. This is because the rate your compensated for power won’t match what you’re being charged to use it under NEM 3.0 rules.

Minimize reliance on the grid

At night, when the sun is down, your solar panels won’t be producing power. Normally, this is when you would have to draw energy from the utility grid. With NEM 3.0, you will charge your battery during the day with any excess solar power you produce and draw from it later (at night) to avoid paying peak utility rates from consuming power.

How long will it take to save?

Average payback periods will vary greatly depending on what your energy goals look like. Some customers will prioritize energy independence with home backup capabilities, which can extend the payback period significantly.

However, if your goal is more savings-focused, it is likely our solar experts can help you design a solar and battery storage system that will bring you a return on your investment in just 10-12 years. Keep in mind, the average payback period under NEM 2.0 policy was 7.5 years. Click here to learn more about how to calculate your average payback period with solar.

How much will I save?

This is the number one question on people’s minds. The good news is you can still achieve significant lifetime savings with a solar and battery storage system. Although the payback period will be slightly extended (2-3 years longer), your lifetime savings can range from $50,000-$120,000. This is only 30% lower than average lifetime savings projections under California’s NEM 2.0 policy.

Your lifetime energy savings will be equal to the number of years you plan on living in the home times your average annual savings. Annual savings is the difference between projected annual energy cost offset and your financing payment for your solar and battery storage system.