NEM 3.0 Update 2023 | Option One Solar

California NEM 3.0 Watch 2023

Updated December 15th, 2022, NEM 3.0 Update – Today, the CPUC approved NEM 3.0.

This result means the 120-day sunset period for NEM 2.0 has started. Customers will have until April 14th, 2023, to get new applications for PTO submitted if they want to remain on NEM 2.0.

The NEM 1 and NEM 2 grandfathering will remain the same as the previous revised proposal, providing 20 years of NEM benefits from the PTO date.

Watch Our Latest Solar Podcast about NEM 3.0

Here are the changes/updates for NEM 3:

  • Residential export rate adders:
NEM 3 update residential adders for export rate
Image Source: CALSSA NEM 3 Adders
    • Each year will deduct 20%
    • Benefits do not pass on to new homebuyers
    • New construction is not eligible
    • No adders for SDG&E or for non-residential customers
    • Adder level is based on the year of interconnection and remains constant for nine years
  • CPUC also dropped the requirement for utility companies to notify solar customers if their system stops exporting for more than 24 hours. But they reserve the right to revisit this issue later, outside of NEM proceedings.
  • Solar customers who lose grandfathering (of NEM 1 or 2) during the first five years of NEM 3 when the glide path is active will not qualify for the ACC Plus rates. In this case the homeowners will get ACC rates without the adders because it is assumed that your system has already paid for itself.
  • Current Customer Additions:
    • Customers that add more than 10% to existing systems must submit a new application.
    • New applications submitted after APRIL 15, 2023, will be on NEM 3.
    • Battery additions will not affect current NEM agreements, even after NEM 3.
  • NEM 3 will only be locked-in for 9 years and is only transferable to a spouse, partner, or to another tenant (if the landlord stays the same). If the property or home is sold, the new owners will not receive NEM benefits.


NEM 2.0 Versus NEM 3.0

No matter how NEM changes, Option One Solar can help our customers with the best solution for their solar system to eliminate their electric bills.

Act now to lock in the NEM 2.0 grandfathering for the next 20 years

Updated November 10th, 2022, NEM 3.0 Update – Today, the California Public Utilities Commission (CPUC) has released a revised proposal for net energy metering, a.k.a. the long-dreaded “NEM 3.0”.
Our initial analysis of this proposal shows that energy credits will be cut from 30¢ per kilowatt to only 8¢. Resulting in a 75% reduction in the value of exported solar electricity.
The proposed decision will allow customers to oversize their systems by 150 percent of current usage. However, with the sharp reduction in energy credits, solar power systems would need to be built to 400% in order to reach a net-zero electricity bill.
Though this proposal avoids the unfair and illegal solar taxes from the previous version, the decline in the value of solar-generated electricity makes this new proposal much worse.

“If passed as is, the CPUC’s proposal would protect utility monopolies and boost their profits while making solar less affordable and delaying the goal of 100 percent clean energy.” – said Bernadette Del Chiaro, executive director of CALSSA, in an emailed statement.1

net energy metering 3 NEM 3.0 digital meter

NEM 1.0 & NEM 2.0 changes – From the updated proposal, no reduction in grandfathering for existing solar customers. Homeowners will have 20 years from their PTO date. We will continue to see if there are any further changes. So act now to start going solar and locking in with 20 years of grandfathering.

New Net Energy Metering Credit – The new proposal stated that solar customers must still be on TOU-plan. However, the credits will be calculated based on the Avoided Cost Calculator and average out over each month with different values for weekdays and weekends.

On top of the Avoided Cost Calculator value, an adder based on your utility companies will increase the credit value.

  • Customers with adders get constant adders for nine years
  • Value is 20% lower each year for new customers
    • e.g. a SCE non-CARE residential customer installing in year two gets a $0.032 adder for nine years
      (80% of $0.040)
  • The adder does not apply to new construction.

These adders will have higher rates for low-income customers and vary based on your utility.

NEM avoided cost adder example
The adder may change in future NEM updates.

The changes will significantly impact solar homeowners' energy export value and slower payback period instead of 6 but 9 years because of the lower payback value and the rate increase by utility companies.

Solar energy is benefiting our customers to net-zero their annual usage with NEM credit, but utility companies are trying to change it and profit to their pocket. Remember, solar energy systems serve as micro-grid that helps ease the electric grid system's stress.

NEM 3 import and export price example

NEM 3.0 and battery backup system – Adding a solar battery backup to your current system will not affect your NEM grandfathering.


NEM 3.0 Key Timelines:

  • Utility companies expect a Final Decision to be issued in Q1 of 2023. 
  • The proposal is scheduled for a vote on December 15, 2022
  • If implemented, the “sunset date,” or the last date by which projects can submit to interconnection to receive the preferable NEM 2.0 rates, would land on April 15, 2023.


  • Bookmark this article, and we’ll keep you up-to-date on the latest NEM news.


The Previous NEM 3.0 Proposal

Despite the popularity of solar and net metering for homeowners across California, the CPUC’s proposed decision released last December would have implemented a monthly solar penalty tax while also slashing credits consumers receive for their excess solar energy.
Earlier this year, the previously proposed decision was shelved earlier this year after intense backlash and public disapproval from Governor Newsom.

With rooftop solar’s vital contribution to reaching California’s clean energy goals, the promise of battery storage for grid reliability, and new federal incentives for going solar, a diverse coalition of solar supporters is calling on the CPUC to keep solar growing and affordable for all types of consumers.
More than 160,000 people submitted comments to the CPUC and Governor Newsom calling for a strong NEM-3 decision, the highest count in CPUC history.
NEM 3.0 solar update

Option One Solar, other solar companies, and solar homeowners across California will continue to fight against these utility monopolies for your right to generate electricity.

The proposed decision is not yet set-in-stone, so there is a chance to push it back… just like we have done several times already.

However, the only guaranteed way to avoid NEM 3 is to go solar now. Existing solar customers will be “grandfathered” into NEM 2.0 for 20 years after PTO.

Time is running out. The last date projects can submit to the grid-tied solar systems to receive the preferable NEM 2.0 rates would be April 15, 2023.

So if you go solar with Option One this year, you can completely avoid all of these issues and reap the most benefits of going solar.

Have questions or try to understand how solar can benefit your life? Give us a call

If you already have solar and want to help us fight against this proposal, there are a number of ways to help.


You can present public comments here.

You can also send donations to Solar Rights Alliance here.

Stay Tuned! We will continue to update this post with the latest information about NEM 3.0.

  1. “CALSSA Statement on CPUC’s Revised Proposed Decision on Solar Net Metering.” Web Blog Post. CALSSA NEWS RELEASE. CALSSA, Nov. 10th, 2022



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