If you've looked into going solar recently, you've likely heard the term "NEM 3.0." This refers to the Net Energy Metering 3.0 policy that took effect in California in April 2023. It significantly changed how utilities pay homeowners for the specialized excess electricity their solar panels produce.
The Old Way (NEM 2.0)
Under the old rules, for every kilowatt-hour (kWh) of solar energy you sent back to the grid, the utility gave you a 1-for-1 credit. It was like using the grid as a free battery.
The New Way (NEM 3.0)
Under NEM 3.0, the credit value for exported solar energy has dropped by roughly 75%. This means sending power back to the grid during the day provides very little financial return.
The Solution: Solar + Battery
Because sending power to the grid pays less, the new strategy is Self-Consumption. Instead of exporting your excess solar power, you store it in a home battery (like a Powerwall). Then, you use that stored power in the evening when electricity rates are highest.
This approach allows you to avoid paying peak rates to the utility, making solar economics strong again—often saving homeowners 70-90% on their bills.
Is It Still Worth It?
Absolutely—but only if you do it right. A standalone solar system now has a longer payback period (7-9 years). However, a hybrid solar + battery system can still pay for itself in 6-8 years while providing blackout protection.
Official Resources
Read the official California Public Utilities Commission decision on the Net Billing Tariff (NEM 3.0).