NEM 3.0 Explained: What It Means for California Homeowners Going Solar
Oct 30, 2025
By Esteban Guitian
3 min to read
What Is NEM (Net Energy Metering)?
Net Energy Metering (NEM) is the system that tracks how much power your home sends to and receives from the grid.
Here’s the short version:
Under NEM 1 and NEM 2, when your panels produced more electricity than you used, your meter could “spin backward.”
You earned almost full retail credit for that extra power — effectively lowering future bills.
Those programs were incredible for early solar adopters — and if you already have solar, you’re still locked into those benefits for years to come.
For new solar customers, a new chapter has begun: NEM 3.0.
What Changed Under NEM 3.0?
Under NEM 3.0, you still receive credits for extra energy — just at a lower rate.
Comparison | NEM 1 & 2 | NEM 3.0 |
Credit Value | Near retail rate (≈25-35¢/kWh) | Closer to wholesale (≈5-10¢/kWh) |
Grandfathered Customers | Keep old rates up to 20 yrs | New installs get NEM 3.0 rates |
Payback Period | 4-6 years typical | 6-9 years typical |
Best Strategy | Export power | Store & use your own power |
How Homeowners Can Still Win Under NEM 3.0
Even though export rates are lower, solar remains one of the best financial and environmental decisions you can make.
Use More of Your Own Power
When your panels power your home directly, you’re saving at the full retail rate — the lower export rate doesn’t apply.
Add a Battery
Systems with Tesla Powerwall 3, Sunrun Brightbox, or similar storage allow you to save excess power for nighttime or peak hours, reducing reliance on the grid and increasing savings.
Protect Yourself from Rising Utility Rates
Electric rates in California continue to rise. Solar locks in a predictable cost and helps shield your family budget.
Leverage the 30% Federal Tax Credit
The Federal Investment Tax Credit (ITC) still covers 30 percent of the cost of your solar and battery system — a major incentive untouched by NEM 3.
Why It’s Still a Great Time to Go Solar
Even with the new rules, solar owners can expect:
Significant bill reductions (often 60–70%)
Energy independence during outages
Increased home value (homes with solar sell for about 4% more on average)
A cleaner, greener footprint for your family
If you’re on NEM 1 or 2, you’re in a fantastic position.
If you’re new to solar, now’s the time to design a smarter, battery-ready system for NEM 3.0.
The Hope Solar Perspective
At Hope Solar, we view NEM 3 not as a setback but as an evolution — a move toward smarter energy use and greater self-reliance.
Our goal is to build systems that are efficient, battery-ready, and future-proof, helping families create their own energy independence.
Ready to take the next step?
Schedule your free Hope Solar assessment when you want and let’s design your personalized plan for savings under NEM 3.0.
Or would you rather listen to some random door-knocker?
