Anti-Solar-Panel Net Metering 3.0 Bill Is Coming to California

By   |   November 1, 2022   |   Dish!

A battle has raged in California for years over the future of a system known as net
energy metering (NEM). Customers who produce more power than they need from
solar panels may transmit the surplus to the utility company and obtain a benefit equal
to the retail price of the electricity they export.

In the wake of the upcoming midterm elections on November 8, 2022, a fresh updated
NEM 3.0 proposal will be made public. Calgarians will be keeping a careful eye on it,
since utilities claim that the passage of the Inflation Reduction Act would eliminate the
need for reasonable net metering pricing. According to a recent survey conducted by
Berkeley Labs, middle- and lower-class Californians made up the vast majority of
rooftop residential solar customers.

In what ways does it matter to you?

Due in large part to the implementation of net energy metering, the solar panel
installation rate in California has skyrocketed to over 50% of the national residential
market, with over 1.3 million rooftops now sporting solar panels. It also helped develop
dispersed commercial rooftop projects, another essential aspect of California’s push to
power decarbonization. It was in jeopardy when a competing plan, Net Metering 3.0, supported
by investor-owned utilities
was submitted.

The planned decision would have slashed the payout for surplus solar energy transmitted
to the grid by over 80% and added a monthly tax of $8 per kW. This tax, which would amount
to $64 per month for a typical 8 kW installation, effectively eliminates solar energy as an

What NEM 3.0 may imply for solar savings

Are you wondering, when will NEM 3.0 go into effect? A California homeowner that
decides to go solar would have a very different solar experience if the following
modifications are implemented. A PG&E customer installing a 6 kW photovoltaic system
according to the existing NEM 2.0 scheme should anticipate $183 in monthly savings
and a payback time of little more than 6 years. CalSSA predicts that the payback period
for the same client will rise to 11.6 years under the proposed configuration of NEM 3.0.

Why Net Metering 3.0 was criticized

The plan was changed when it was criticized by those concerned about the
environment, energy, and employment in California. Any client, regardless of whether
or not they have rooftop solar, will have to pay an additional $0.05/kWh under the
proposed plan. For comparison, the typical American spends roughly $0.145/kWh for
power. The new judgment from the CPUC appears to imply the Commission is
interested in replacing the Market Transition Credits with per-kWh monetary credits,
which might momentarily boost the economics of solar, but eventually leave
Californians in the same dilemma as the currently proposed decision.

According to their original plan, NEM 3.0 California assures that consumers pay for
expenses required to service them via a customer fee and offers a storage incentive
through non-tiered cost-based TOU rates. Time-of-use (TOU) tariffs are higher in the
evenings, but customers who install a battery storage system will be able to save money
by not using electricity from the grid at certain times. In an industry note, Phil Shen
from ROTH Capital Partners predicted that the new plan, due out on November 8th,
might include a monthly fixed price of $10–$20 and a quick glide path to low export
rates of $2–$6 per kilowatt-hour.

photo credit: Pexels

Filed Under: Dish!
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