The Benefits of Solar Under NEM 3.0: Why It's Still a Smart Investment

aerial view of neighborhood in california with solar panels

California’s net energy metering (NEM) 3.0 is officially in effect, leaving many homeowners wondering whether solar is a good investment in California. 

Thankfully, the benefits of solar remain strong even as NEM 3.0 changes export rates for solar customers. Solar panels still provide long-term financial and environmental benefits, and the anticipated solar panel ROI in California is just 8-9 years under NEM 3.0.  

Keep reading to learn more about what NEM 3.0 means for solar and how you can maximize your savings under the new policy. 

California Net Metering Changes in 2023 

Shift from Net Metering to Net Billing 

The biggest change to net energy metering in California in 2023 is the shift from net metering to net billing. With net metering, solar customers receive the full retail rate for the electricity they send to the grid. That means your utility buys your power for the same price they would sell it to you for. With net billing, export rates are calculated separately and vary based on the time of day, week, and year. 

Battery Storage Becomes Increasingly Valuable 

The shift to net billing does not eliminate savings, especially for solar plus battery systems. Solar plus battery systems are better equipped to load shift—moving grid electricity consumption to the most cost-advantageous time periods without reducing the total amount of power you use. Load shifting is increasingly important under NEM 3.0 and solar batteries make it easy to do by giving you a source of backup solar power you can tap into at any time. 

Benefits of Solar Under NEM 3.0 

Here’s why solar is still worth it in California while NEM 3.0 is in effect: 

Solar Power Is Cheaper than Grid Power 

Using solar panels to produce your own electricity is more affordable than buying from the grid regardless of net metering benefits. Solar cost savings are highest in areas where there is plenty of sunshine and high electricity rates—two things California definitely has. With solar panels, you will avoid rising electricity rates and save money on your bills for as long as your system lasts—25+ years in most cases. 

Solar Plus Battery Storage Protects Against Outages 

Cost savings aren’t the only solar panel benefit, especially if you pair your system with battery storage. Solar plus battery systems remain operational during a power outage, unlike solar-only systems, giving you backup power during grid outages, PSPS events, and rolling blackouts. 

Payback Period for Solar Plus Battery Storage Is the Same as Solar Alone 

You will save more with solar panels plus battery storage under NEM 3.0 thanks to the ability to load shift while grid rates are high. Because of this, the payback period for solar panels with battery storage will be about the same as the payback period for solar alone, making it easier to justify the added cost of a solar battery.

The Solar Tax Credit Is Stronger than Ever 

Net metering isn’t the only California solar incentive in 2023! The 30% federal solar tax credit is available until 2032. With the tax credit, you can reduce your federal tax liability by 30% of your solar installation costs, making solar panel and battery installation more affordable. 

Find a Solar Contractor Near You in California 

An experienced, trustworthy solar installer can help you get the most out of your investment in a solar energy system. The Clean Energy Connection’s free directory makes it easy to find high-quality solar contractors in your area. The contractors included in the directory have been carefully vetted to ensure the highest level of quality and customer service. You can search the directory by location, services offered, languages, financing options, and more to find the best solar contractor for your project. 

Start saving with solar.