In April 2023, the California Public Utilities Commission introduced the third revision of its net energy metering (NEM) policy, affecting SCE, PG&E, and SDG&E service areas. This update brings significant changes to how California businesses, schools, universities, and municipalities are compensated for investing in solar and storage.

Here’s a brief overview of these changes and how your business can capitalize on battery energy storage systems to maximize savings on your next solar project.

Understanding NEM 3.0

What is NEM 3.0?

Net energy metering (NEM) policies allow utility customers who generate their own solar energy to sell excess electricity back to the grid, providing savings.

Previously, under NEM 2.0, utility customers were reimbursed at the retail rate for excess solar production. This encouraged investments in onsite solar systems by offsetting future electricity bills.

Under the new NEM 3.0 policy, California has transitioned from net metering to net billing. Organizations now receive compensation for surplus solar production at a rate that fluctuates based on the time and day of export, reducing the value of solar exports by up to 75% compared to the retail rate.

Impacts of NEM 3.0 on Californian Commercial Ventures

Energy Storage Solutions

National Energy Installers can help you achieve significant savings by combining onsite solar with a battery energy storage system. Instead of selling excess solar back to the utility at the new lower variable rate, you can store surplus energy in a battery system.

By storing energy at lower costs and using it during peak periods with higher electricity rates, your organization can significantly reduce its energy bills, take advantage of time-of-use rates, and enhance energy independence and reliability.

Given the recent increases in electricity rates by California’s investor-owned utilities, integrating solar + storage under NEM 3.0 can lead to greater annual savings compared to solar alone, offering more savings over the system’s lifespan.

Maximize NEM 3.0 Benefits in California

Here are additional advantages of combining solar and storage under NEM 3.0:

  • Increased Energy Savings: Commercial solar energy storage protects your organization from high and fluctuating peak energy charges. By using stored energy during peak periods, you save on overall energy costs and avoid peak usage penalties.
  • Reduced Carbon Footprint: A solar + storage system is energy-efficient with no direct emissions. It supports your sustainability goals by significantly lowering your carbon footprint compared to installing solar alone.
  • Predictable Payments: Financing through a power purchase agreement (PPA) allows your business to purchase power at a fixed rate, transforming the solar + storage project from a capital expenditure to a predictable operating expense throughout the agreement’s life.
  • Opportunities for Grid Services Participation: Investing in a solar + storage system may qualify your business for additional revenue through programs such as Demand Side Grid Support (DSGS), Demand Response Auction Mechanism (DRAM), and Emergency Load Reduction Program (ELRP Group B).

Get Expert Recommendations

Curious about how your business can benefit from solar + storage?

Let’s discuss! Fill out the contact form below to schedule a quick 30-minute consultation with one of our experts from National Energy Installers to explore if solar + storage is the right solution for your organization.