If you checked in on us in 2022, you know that our company along with thousands of fellow solar enthusiasts rallied in opposition to NEM 3.0 to keep the incentives in California as strong as possible. Our efforts were not in vain. The new plan for net metering in California (also known as NEM 3.0) is more favorable than the original proposal and still yields a favorable ROI – mainly if you add battery storage.
Overall load consumption was causing strain on the grid during peak hours (between 4p.m.- 9p.m.) when PV systems were not producing power. Increased demand required a solution to provide stable, reliable power to consumers and one of the ways to do this was to build utility scale battery storage plants. To be able to fund these systems, rates had to increase across the board and we now have NEM 3.0. To avoid power shut-offs, high TOU rates, and peace of mind that your PV system can provide reliable power at any time of the day, consider adding battery storage.
Some Good News!
- You can still qualify for NEM 2.0 if you submit your application by April 13th, 2023. EcoDirect offers permitting services where we provide a full set of plans for you to send to both the building department and utility company (available with full system purchases only).
- Grid-Tie only systems will benefit greatly under NEM 2.0 vs NEM 3.0 due to the rate structure changes as provided by our friends at SolarEdge. (Thank you!)
- Grid-Tie with Battery Storage will also benefit from the current plan as you are able to export power at a higher price per kWh during the day and during peak hours if you choose to do so.
- Understanding your monthly bill and the different rates for different time of the day is critical to understanding your payback period whether under NEM 2.0 or NEM 3.0.
Is NEM 3.0 still going to have a reasonable ROI?
- YES – While there is a longer payback period, you still qualify for the 30% ITC tax credit which is now extended to 2032. Estimated payback period for grid-tie only systems is about 12-15 years vs. 7-9 years currently. You can find more information through Energy.Gov on the incentives here: https://www.energy.gov/eere/solar/articles/solar-investment-tax-credit-what-changed
- YES. While NEM 3.0 does increase the ROI payback period, adding storage into your system will actually increase your overall payback period bringing most systems back to the 7-9 year ROI period. https://www.energy.gov/eere/solar/articles/should-i-get-battery-storage-my-solar-energy-system
- Not as much for those looking for a small-medium PV system for their home without storage unless their primary consumption is during the day and are able to utilize all of their PV production during that time vs. exporting to the utility grid.
Are additional incentives for storage coming?
Potentially! California currently offers a Self-Generation Incentive Program, SGIP, that will pay you per kWh of storage if you live in a fire prone area. For more information and to see if you qualify go to https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/demand-side-management/self-generation-incentive-program
Keep an eye out for information on VPP, Virtual Power Plant, incentives and other state and local storage incentives when going considering your own ESS, Energy Storage System. https://www.dsireusa.org/
I heard battery costs are coming down, should I wait?
This is a question we get asked a lot. Prices do change. Some goods fall in price, and some increase. Lately, we are seeing battery pricing increase and remain at a consistent level overall when comparing our manufacturers storage options. You may see falling prices for recycled batteries long term with a possible trade-off a lower cycle life or new technology that allows you to harness and store energy for less upfront cost. However, with the higher TOU rates from the utility, you will most likely have a faster ROI today from your purchase than the savings down the road for a different storage solution.
NEM 3.0 Approved by the CPUC is Effective April 13th 2023
- Getting your application in now will yield a faster ROI between 5-10 years.
- Adding battery storage to your system will help increase your ROI and is what will make going solar a profitable investment once NEM 3.0 is passed.
- Understanding your rate structure and working with a skilled solar and storage representative at EcoDirect will ensure you get the best system for you application.
- Investing in battery storage and reducing your PV system size may be the best way to maximize your overall system performance if you are using more energy during peak time-of-use times.
Helpful Guides for Permitting
SimpliPHI is a leader battery manufacturer based out Oxnard, CA that specializes in LFP, Lithium Ferro-Phosphate Battery Storage Solutions. They pride themselves on offering secure, reliable and safe power anywhere, anytime. https://www.ecodirect.com/SimpliPhi-Storage-s/1162.htm
SolarEdge offers a battery storage system that can easily integrate into residential homes for emergency back-up, TOU and EV charging support. Check out their take on NEM 3.0 and their battery storage solutions: https://www.ecodirect.com/SolarEdge-Energy-Hub-Inverters-s/1144.htm
Have more questions?
Call our Solar and Storage Sales Team @ 760.597.0498 or email firstname.lastname@example.org
For Commercial Energy Storage Solutions please email ESS@ecodirect.com