{"id":10867,"date":"2023-12-15T00:55:45","date_gmt":"2023-12-15T00:55:45","guid":{"rendered":"https:\/\/www.solar.com\/learn\/?p=10867"},"modified":"2023-12-15T18:16:19","modified_gmt":"2023-12-15T18:16:19","slug":"nem-3-0-export-rate-adders","status":"publish","type":"post","link":"https:\/\/www.solar.com\/learn\/nem-3-0-export-rate-adders\/","title":{"rendered":"NEM 3.0 Export Rate Adders: Why It Pays to Go Solar Early in NEM 3.0"},"content":{"rendered":"

The new solar billing structure for California’s three investor-owned utilities has caused many homeowners to pause, alter, or altogether abandon their plans for installing rooftop solar. But while home solar in California isn’t the complete no-brainer it once was under 1-to-1 net metering, it still offers some of the best energy cost savings potential of any state in the US.<\/p>\n

This is especially true for the earliest adopters of NEM 3.0 solar systems, who can benefit from three things:<\/p>\n

    \n
  1. Export rate adders up to 4 cents per kilowatt-hour<\/li>\n
  2. Several months of billing under the NEM 2.0 structure<\/li>\n
  3. Avoiding imminent utility rate hikes<\/li>\n<\/ol>\n

    Don’t get me wrong: We all miss NEM 2.0. But it’s officially gone, and the early birds in NEM 3.0 will get the fattest worms.<\/p>\n

    In this article, we’ll break down the three economic advantages of going solar as soon as possible under NEM 3.0<\/p>\n

    NEM 3.0 residential export rate adders<\/h2>\n

    The first, and greatest, advantage of going solar under NEM 3.0 in 2023 is locking in the highest possible export rate adders.<\/p>\n

    “Export rates” refers to the value of excess production that solar owners push onto the grid, and “adders” means exactly what it sounds like.<\/p>\n

    If you’re familiar with NEM 3.0<\/a>, you know that its defining feature is export rates that are, on average, ~75% lower than they were under NEM 2.0. That’s because the NEM 3.0 export rates are based on the “Avoided Cost Calculator” instead of the retail price of electricity and vary throughout each hour of the day.<\/p>\n

    Export rate adders are designed to ease the shock of these dramatically reduced export rates and reward early adopters of NEM 3.0 solar billing.<\/strong> As the chart below shows, export adders are only available for the first five years of NEM 3.0 and decrease by 20% each year, so the earliest NEM 3.0 adopters lock in the highest export rate adders.<\/p>\n\n\n\n\n\n\n\n\n
    Interconnection year<\/td>\nPG&E adders (cents\/kWh)<\/td>\nSCE adders (cents\/kWh)<\/td>\n<\/tr>\n
    Year 1 (April 15, 2023 – April 14, 2024)<\/td>\n2.2<\/td>\n4<\/td>\n<\/tr>\n
    Year 2<\/td>\n1.8<\/td>\n3.2<\/td>\n<\/tr>\n
    Year 3<\/td>\n1.3<\/td>\n2.4<\/td>\n<\/tr>\n
    Year 4<\/td>\n0.9<\/td>\n1.6<\/td>\n<\/tr>\n
    Year 5<\/td>\n0.4<\/td>\n0.8<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Export rate adders are not available to SDG&E customers.<\/em><\/span><\/p>\n

    For example, an SCE customer that gets permission to operate (PTO) in the first year of NEM 3.0 locks in a 4 cents\/kWh export rate adder<\/strong> for\u00a0every single hour of the first 9 years of operation.<\/p>\n

    Four cents per kilowatt hour may not sound like much but in many cases, this 4-cent\/kWh adder would double the hourly export rates for SCE in 2023, as shown in the example day below.<\/p>\n

    \"example<\/p>\n

    Export rate figures for example purposes only.<\/em><\/span><\/p>\n

    And remember, this 4-cent adder is locked in for 9 years and continues to increase the value of your excess solar product, even as NEM 3.0 export rates rise over time. The chart below shows the average NEM 3.0 export rates expected from 2023-2050, based on an analysis by CALSSA.<\/p>\n

    The lowest rates are between 2023 and 2030, but homeowners can improve these rates by interconnecting a system in the first year of NEM 3.0.<\/p>\n

    \"average<\/p>\n

    Quick facts about NEM 3.0 export adders<\/h3>\n
      \n
    • Export adders increase the c\/kWh value of excess electricity pushed onto the grid from NEM 3.0 solar systems<\/li>\n
    • Adders increase the value of exports for every single hour for the first 9 years of operation<\/li>\n
    • SCE and PG&E customers who interconnect a solar system in the first year of NEM 3.0 (before April 14, 2024) lock in the highest export adder<\/li>\n
    • Export rate adders are only available for the first 5 years of NEM 3.0 and decrease by 20% each year<\/li>\n
    • Adder value is based on the interconnection date of the system<\/li>\n<\/ul>\n

       <\/p>\n<\/gs-injectable>\n

       <\/p>\n

      NEM 2.0 billing during the NEM 3.0 transition<\/h2>\n

      In addition to locking in the highest export rate adders, the earliest NEM 3.0 adopters will likely benefit from several months of NEM 2.0 billing that can increase their savings and decrease their payback periods.<\/p>\n

      NEM 3.0 is an incredibly complicated billing structure that features 576 different export rates throughout the year. And now that it’s approved, the IOUs have the task of building, testing, and launching brand-new software to accommodate solar billing.<\/p>\n

      SCE and SDG&E’s NEM 3.0 billing systems were implemented on December 15, 2023, according to CALSSA. However, PG&E has requested an extension to implement their NEM 3.0 billing system until\u00a0August 31, 2024.\u00a0<\/strong>That means PG&E customers can go solar under NEM 3.0 and\u00a0still enjoy several months of NEM 2.0 billing<\/em> before the system is implemented.<\/p>\n

      Sam breaks this strategy down in the video below.<\/p>\n