April 15th of 2023 brought to California the dreaded arrival of Net Energy Metering 3.0 (NEM 3.0), referred to by the Utility Companies as “The Solar Billing Plan.” 

If you’re an existing Sunline customer with an operational system or if your interconnection application was submitted prior to April 15th you do not need to be concerned about these changes. You will get to continue reaping all the benefits of NEM 2.0 or even NEM 1.0 if you’ve been a solar customer for that long.

However, you might be wondering about your friends, family, and associates that are interested in solar, but haven’t made the leap yet – does solar still make sense for them. Let’s start with the negatives:

Reduces Monthly Energy Bill Savings for New Solar Customers

NEM 3.0 will force a majority of customers to purchase energy storage with their solar system in an effort to export as little energy as possible back to the grid. This means a higher upfront system cost. The reason for this is under these new guidelines solar customers are credited at lower rate for energy exported to the grid. 

Significantly Slows Growth In The Solar Industry Throughout California

California has long been the leading proponent of the green energy movement. With a favorable approach to green environmental and climate standards, California has been the tip of the spear for a number of environmentally sound projects, from solar tax credits to vehicle pollution standards to food waste recycling programs. 

Not surprisingly, California has been at the forefront of the solar movement. The unrelenting push to drive up renewable energy generation and capacity makes California the leading producer of solar energy in the entire country every year. 

However, this rapid and consistent growth is going to be significantly hampered by these new policies. By increasing the costs of systems and increasing the payback period the overall financial incentive of going solar has been reduced. It’s still incredibly beneficial to as a home-owner and to the environment to go solar, but the financial gains have been impacted in a way that is certain to slow the incredible growth the solar industry has seen in California for decades.

Despite these negatives there are still an overwhelming number of positives that remain in favor of going solar:

ITC Federal Tax Credit at 30%

In August of 2022 Congress passed an extension on the Federal Residential Solar Energy Credit. Not only did this extend the tax credit until 2035, it raised the credit from 26% to 30% until 2032. It’s great to see the  support to get more consumers going solar by offering an amazing financial rebate like this.

SGIP Rebates for Energy Storage Still Available

The Self-Generation Incentive Program (SGIP) offers rebates for installing energy storage technology at both residential and non-residential facilities. These storage technologies include battery storage systems that can function during a power outage. There will be an additional $900 million allocated for SGIP starting on July 1st, 2023

Solar still makes good financial sense and it’s here to stay.

While the arrival of NEM 3.0 brought some unfortunate increases in solar pricing, it’s  actually a sign that solar is stronger than ever. The utility companies wouldn’t be fighting so hard to make it less financially viable for new solar customers if they weren’t threatened by the prospect of a cleaner, greener future at cheaper cost. Luckily, there is only so much they can do to hinder the green energy movement and it’s still an incredibly attractive financial investment to go solar. The average payback period is a little longer now at 6 to 8 years, but the amazing benefits of increasing the value of your home, having backup power in the event of a grid outage, lowering your monthly utility bills, and contributing to a cleaner environment are still all there.