Net Energy Metering (NEM) 3.0 is the latest update to California’s program that allows homeowners with solar panels to receive credits on their energy bills for excess electricity they generate and send back to the grid. The program has undergone significant changes, which have both benefits and limitations for homeowners.

The most significant change under NEM 3.0 is the transition to Time-of-Use (TOU) rates. This means that the credits homeowners receive for sending excess electricity back to the grid will vary depending on the time of day. Under NEM 3.0, credits will be highest during peak hours, which typically occur in the late afternoon and early evening.

To maximize the benefits of NEM 3.0, homeowners should consider the timing of their energy use. For example, they can take advantage of off-peak hours to run appliances, charge electric vehicles, and store excess energy in a battery. Then, during peak hours, they can draw on the stored energy instead of sending excess energy back to the grid for a lower credit.

In addition to TOU rates, NEM 3.0 also includes a cap on the amount of electricity that can be credited each month. Under NEM 2.0, homeowners could receive credits for up to 100% of their energy usage. However, under NEM 3.0, the cap is reduced to 95% of a homeowner’s annual energy usage. This means that homeowners may not be able to offset their entire energy bill with credits.

To maximize the benefits of NEM 3.0, homeowners should consider installing a solar panel system that generates slightly more energy than their annual energy usage. This will ensure that they can receive credits for the maximum amount of electricity allowed under the program.

Overall, NEM 3.0 offers both benefits and limitations for homeowners with solar panels. By understanding the changes and taking advantage of TOU rates and installing a properly-sized solar panel system, homeowners can maximize the benefits of NEM 3.0 and potentially save money on their energy bills.