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Is Solar Worth It Under PG&E NEM 3.0?

Updated: Apr 29

PG&E’s Net Energy Metering 3.0 (NEM3.0) went into effect on April 14, 2023. If a customer submitted a solar project to PG&E before that date, they were grandfathered into NEM2.0. Why is that important? Well, under NEM2.0, PG&E would give customers close to retail value for their excess solar energy. Under NEM3.0, PG&E gives customers a wholesale rate for their excess solar energy. Is solar still worth it under NEM3.0?

  • NEM2.0 Energy Solar Credit: Retail rate of about $.30/w.

  • NEM3.0 Energy Solar Credit: Wholesale rate of about $.05/w.

How Solar Works to Offset Your Electricity

First, let’s discuss how solar works on an average home. Solar panels produce electricity when the sun is out. They produce 3 to 4 times more power than a home actually needs during the middle of the day. This excess power is either sent to PG&E as a credit, or is stored in a battery to be used after the sun sets. Under NEM2.0, The excess energy would be sent to PG&E, and the credits would offset the evening usage. Under NEM3.0, the monetary value of the credits are much lower, and will not offset the cost of evening usage after the sun sets. This is where battery storage comes in.

  • Solar makes 3 to 4 times the home’s electrical needs when the sun is out.

  • This excess is either sent to the grid as a credit, or stored in a battery for evening use.

  • NEM3.0 solar credits alone will not offset all of the home’s evening usage.

diagram: How your system works electricity from solar to home and to the grid

Solve The Problem with a Battery

Instead of sending the excess solar to PG&E for a minimal wholesale credit of $.05/kwh, it is much more beneficial to store the energy in a home battery that can be used to power the home after the sun has set. This works great to eliminate evening usage during peak rate times where the majority of a home’s electrical usage, and bill amount comes from.

Adding a battery to the solar system adds more grid independence, bill savings, and the ability to have partial or whole home back-up during grid power outages. However, it does come with more equipment costs compered to just purchasing solar. This can increase the breakeven timeline from roughly 4 years, to about 8 years on average.

  • Instead of sending excess energy to the grid, store it in a battery for evening use.

  • Battery storage offers grid independence, bill savings, and back-up power, but increases equipment costs.

diagram: generating excess solar to home, to the grid, and to battery

So, Is Solar Worth It Under PG&E NEM 3.0?

Every home is unique in its electrical needs, but the short answer is YES! Solar + Battery is worth it under PG&E NEM 3.0. While the solar breakeven timeline may be extended with the addition of battery storage, that timeline will shrink. As PG&E continues to increase rates with big changes on the horizon for 2024, that timeline will get smaller and smaller to pre es. Add in the benefits of back-up power, and solar + battery storage is a winning combination.

Are you ready to see what solar and battery storage can do for your home? Reach out to us today for your free energy consultation!


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