California NEM 3.0 / Net billing Tariff

NEM 3.0 (Net Energy Metering 3)

Also known as the, Solar Billing Plan, Net billing Tariff, or Export Rate is a new version of net energy metering policy approved by the California Public Utilities Commission (CPUC) on December 15, 2022. 

It applies to utility customers in the territories of California’s three major Investor Owned Utilities (IOUs):

• Pacific Gas & Electric (PG&E)

• Southern California Edison (SCE)

• San Diego Gas & Electric (SDG&E)

With the new net billing tariff, your solar-generated electricity is sold to the utility at a lower rate and you buy at a higher rate.  Pairing solar with battery storage will be more beneficial under NEM 3.0.

• This change only replaces Net Metering in certain areas in California.

• The export payment rate changes by hour, by day, by month

• New customers will be locked in at current export rates for 9 years

• NEM 2.0 and NEM 1.0 customers will continue enjoying their benefits for 20 years from activation.

• Export rates will be updated for new customers every 2 years

• All things being equal, remaining utility bills will be higher.

• NEM 3.0 allows you to install a solar system up to 150% offset if you plan to increase your consumption.

• The goal this presentation is to try and help customers minimize pushing energy back to the grid except during optimal hours.

More Resources

The power companies are moving away from paying the retail rate (known as one-to-one net metering) and moving to an "avoided costs" payment method.  Avoided costs are the variable costs that electric companies would have to pay to produce electricity themselves or the rate they would have to buy energy from other sources at that moment in time that are not currently in their available supply.

During times when they don't need extra power they pay you nothing for pushing power to the grid.  At times when it would cost them more to generate extra energy, they pay you more to encourage you to push energy to the grid during those hours.

A major theme in the NEM 3.0 documentation text is a push for pairing solar with battery storage. That’s because the issue isn’t generating solar electricity in California; it’s storing and using it, since peak solar production doesn’t align with peak energy consumption.

This chart illustrates how usage rates (import rates) vs export rates vary significantly by the hour. 

How to win in the Net Billing Tariff (NBT):

Minimize exports

<60% offset (solar only systems)  Without a battery, you want to consume all of the energy you are producing as much as possible because the export rates are not great.  To accomplish this you should aim for a lower offset.  

Attach Energy Storage

Attach self consumption storage: Stores excess energy during the day, then at night you can use your stored energy and sell back excess to the grid during peak rates.

Attach full backup storage: Does the same as self consumption, but allows you to also have power during grid outages.

With a battery you can store during the day and use that stored energy at night from when you were normally importing from the grid.  New battery systems also can delay exports to get the highest exports rates possible during a 24 hour period.

This is a representation when people generally use electricity and how that corresponds to peak utility rates.

With solar and no battery you produce and export your excess during the day.

With solar + battery you can produce and store excess energy during the day.  Then at night you can use your stored energy and sell sell back excess to the grid during peak rates.

New battery option: Stores your excess energy during the day and discharges all stored energy at peak rate times.  Does not have backup ability.  If the grid goes down so does the power in your home.

• Less equipment so a lot cheaper

• This battery has a higher return on investment

Self consumption cycles every day, discharges at night and fills with your excess produced energy during the day.

When designing a system you will now be asked when adding a battery which battery type you want to add.

There is a new Aurora storage page available and you can choose between self consumption and backup options.

The difference in prices on this view show the savings of using a battery.  The view above is for the selected month.  You have to click on each month.  They will be updating this slide.

If you have fixed utility charges each month it will not go below that number.  For example above it is $12.75 for this fixed utility charge for this speific utility.

In Aurora on the adders you can choose the battery type.

In Aurora on the Billing page you can see the estimated billing based on the battery.

If you want to add a second battery, go to storage, and add another battery.

Then go to adders and add the second battery cost.

The monthly bill went to $159.45 so compared to one battery at $122.57 the second battery for this testing scenario does not help in self consumption mode.