State officials, The California Public Utility Commission, have published their proposal for new rates in 2022. These new proposed rates will remove many benefits for solar homeowners, making solar energy much less valuable than it is now.
Key NEM 3.0 Changes In 2022:
- The following changes are just a proposed decision that will be voted on January 27, 2022
- A new monthly “Grid Participation Charge” will be $8 per kilowatt of solar power capacity installed on your property. This will become an average monthly charge of $48 for most California homes.
- California Net Metering will be changed to “Net Billing.” The value of excess electricity generated by solar panels will be changed.
- The “Market Transition Credit” will be provided to lock in a 10-year payback period for new solar panel installations.
- If this proposal is accepted, the final changes will take effect on May 27, 2022.
What Is The Grid Participation Charge?
The California Public Utilities Commission CPUC has proposed a new monthly charge for all solar customers access to the utility grid. This new recurring cost will be called the “Grid Participation Charge.” It is a fixed monthly charge of $8.00 for each kilowatt of installed solar panels.
For the average home with 6kW of rooftop solar, this new cost will be $48 per month.
The more extensive your solar system, the larger the monthly charge will be. Option One Solar has installed solar panel systems as high as 20 kW, which would be a $160 monthly fee just for access to the grid!
Net Billing VS Net Metering in 2022
Net Metering is changing to Net Billing. Under the new Net Billing, solar customers generating electricity will send their energy directly to the utility first. All the electricity you consume will be sold back to you at a retail rate.
All the clean solar energy you create will be sent to the utility grid first, paying you a discounted rate. The rate you will earn depends on how much cost you avoid with solar. Your electricity will be resold back to you at a higher rate. We at Option One Solar honestly don’t know how the CPUC is getting away with such nonsense!
The CPUC gives for this change is trying to balance the value of normal electricity and solar. Since solar energy technology is so cost-effective, they want to charge more for clean energy.
“Market Transition Credit” The Same As “Solar Tax Credit”?
- No. The Solar Tax Credit has nothing to do with Net Metering.
- The Market Transition Credit will be a monthly credit from your utility. The amount of the credit will be determined by your solar panel system’s expected power output.
- This credit is available to new residential solar customers that get solar in 2022. Each year the Market Transition Credit will be reduced by 25%, which will only last four years.
- While the Market Transition Credit can be used by solar-powered homes, it encourages new solar customers to combine their new systems with battery storage. New homes built with solar are not eligible for this credit.
What Does NEM 3.0 Actually Change For YOU?
New solar customers will have a much different experience when going solar this year.
In 2021, a new 6kW solar panel installation would provide average monthly savings of $200, and the system could pay for itself in about 6 years. In 2022, that same 6kW solar panel system would take almost 12 years to pay for itself.
Right now, on NEM 2.0, homeowners receive a rate of 22¢-36¢ per kWh. With NEM 3.0, the credits you get for solar energy will go down to 4¢-5¢ per kWh. You will also be forced onto a new Time-Of-Use plan, and you will be charged 48¢ per kWh on future electric bills.
They will be charging you 10-times what they are paying you for the same thing! In addition to that, there would be added fees up to $80 per month!
NEM 2.0 Backdated
All current solar owners with NEM 1.0 & NEM 2.0 are going to have their agreement reduced from 20 years down to 15 years. This shocking change will affect thousands of existing customers.
However, there is still time for new solar customers to get on NEM 2.0. The proposed decision will set a deadline of 120 days to lock in NEM 2.0 for the next 15 years.
What’s Next For California Solar?
The next major milestone is coming in just a few days, on January 27, 2022. In the worst-case scenario, you still have until May 27 to go solar and get NEM 2.0 for your home.