NEM 3.0 California: When It Will Come Into Effect And What You Need To Do To Prepare

NEM or Net Energy Metering has played a very important role in making California the leader in solar power in the US. NEM offers incentives to solar customers so that they realize savings on their utility bills and can even generate some income through solar arbitrage if they are being smart about it.

NEM has been in effect since 1996 and has resulted in nearly 1.3 million households installing rooftop solar power with a total capacity of over 9 Gigawatts, which amounts to 11% of total energy production in California (80 GW). The California Public Utilities Commission (CPUC) has been pushing for reforms in solar energy and the NEM 1.0 and NEM 2.0 plans have created a thriving solar industry and a surge in clean energy in the state.

However, the honeymoon period for the solar market seems to be coming to an end with the proposed decision to implement NEM 3.0. The revised proposal for the program contains several measures which would impact solar owners who have already installed rooftop solar panels and are thinking about installing solar systems.

In this blog, we will attempt to cover the various aspects of NEM 3.0 and how this will impact Californians who are relying on renewable energy to supplement their electricity bills.

A Brief History of NEM

NEM came into effect in California in 1996 as a part of an initiative aimed at increasing private participation in renewable energy and diversifying the energy production in the state. NEM allowed homeowners with rooftop solar installations to be paid full retail tariffs for the excess electricity they produce and send to the grid. With falling prices of equipment and other solar incentives including federal and state tax credits, the solar adoption in California soared.

NEM also had set caps for solar installations at 5% of peak electricity demand. The three utility service providers in the state San Diego Gas & Electric (SDG&E), Southern California Edison (SCE), and Pacific Gas & Electric (PG&E) hit this cap in early 2016. CPUC revised the NEM program to update the schemes and incentivize the growth of solar and came up with NEM 2.0 in 2016.

NEM 2.0 essentially preserved most of the provisions in NEM 1.0 and gave users full retail tariff per kWh of electricity that they export to the grid. NEM 2.0 also provisioned that the customers will be switched to a Time of Use (TOU) plan which had differential rates based on the electricity demand. It also allowed for upfront fees in the form of grid access fees and interconnection fees.

NEM 1.0 and 2.0 was central to making solar projects cost-effective by ensuring that the payback period was restricted to around 6 years. These programs also included a clause that means that the users who availed of the NEM 1.0 or NEM 2.0 schemes would be eligible to avail of the tariff rates and benefits for 20 years which assures this payback period and further cost savings.

NEM 3.0- What Are the Changes?

CPUC proposed NEM 3.0 as the next phase in the NEM program. According to the proposed legislation, it will be called Net Billing. There are several major changes proposed in NEM 3.0 as compared to NEM 2.0. Some of these are below

  • Lower payments per KwH of energy exported to the grid.
  • Reduces the 20 year period for which NEM 2.0 can be availed by existing customers to 15 years
  • Monthly fees in the form of grid participation charge at $8 per KwH of installed capacity
  • Real-time monitoring of energy as opposed to per hour monitoring in NEM 2.0

With these proposed changes, residential customers will not enjoy as many benefits and incentives as NEM 2.0 customers enjoy. The reason behind the proposed changes is that the cost of production of solar energy is not of equal value as the market electricity rates because it does not take into account a lot of infrastructure needs and the market costs. Using an avoided cost calculator, the utility companies are calculating the value for the excess electricity being fed into the grid by solar owners at around 4-5 cents per kWh as opposed to the 22-36 cents that the users save now.

Another side of the argument is the excess fee that low-income households are having to pay to offset the cost of NEM 2.0. The solar incentives are majorly being availed by high-income households and the cost of electricity is also increasing which is being borne by the low-income households currently. NEM 3.0 proposes to balance this disparity. NEM 3.0 is also a way to push more residential and business users to install battery storage to reduce the dependency on the grid during peak hours after sundown.

Additionally, the grid participation charge is going to add a huge amount to the utility bills. Taking an average installation size of 5 KwH, the grid participation charges come to $40 a month and $480 a year. This is in addition to the installation cost and the initial fee. Together, the payback periods for new solar installations will go up to around 12 years for high-income families.

NEM 3.0 also proposes a market transition credit (MTC) program for the initial years to make sure that the disparity does not put people off solar installations altogether. The MTCs proposed are at $1.62/kW for PG&E customers and $3.59/kW for SCE customers. The lower-income segments will receive a larger amount as MTCs to ease the transition ($4.36/kW for PG&E and $5.25/kW for SCE).

Additionally, to encourage more solar adoption in such low-income segments a $600 million incentive fund is also provisioned which will help community solar projects and low-income households adopt solar.

When Will NEM 3.0 Come to Effect?

CPUC is currently making the final decisions regarding NEM 3.0. The initial proposed decision was released in December 2021. In February 2022, the CPUC decided to hold off on further proceeding for an indefinite period. As per the latest news, the CPUC is set to make its final decision in July or August of 2022.

In the current phase, the commission has been consulting with the various stakeholders including the utility companies, the consumers, climate change and renewable energy activists, and parties. The commission has released a set of questions regarding the proposed changes and the parties have been asked to submit their replies to the questions.

How Has the Community Responded to NEM 3.0

The proposed decision was released in December i=t of ire from the community. Mostly. the changes reduce incentives for people to adopt solar power as the savings come down and payback periods go up considerably. Incentives have been key in pushing California’s net solar power production to 9 GW. These incentives are likely to end with the net billing plan.

Several Californians, renewable power evangelists, and activists took to the streets to protest the proposed changes under the banner of the California Solar and Storage Association (CALSSA). There have also been reactions from other stakeholders and employees in the solar industry. There are several campaigns underway attempting to change the proposed decisions to continue incentivizing solar power. The protestors are claiming that the legislation does not consider the indirect benefits of solar power such as reduced dependency on fossil fuels, lesser emissions, and other such impacts.

How Should You Prepare for NEM 3.0?

Given how radical the proposed changes are if you are thinking of installing rooftop solar panels, the best time is now. Given that NEM 2.0 scheme is still available and you will be eligible for these tariffs for 15 years even when the new tariffs come into effect, it would make sense to install solar now and make use of the rebates available.

Another way to go is by thinking about larger community solar projects rather than individual solar projects. The new legislation has not made changes to community solar programs that generate above 1 Mw of electricity and this investment in these would also be a smart idea.

Lastly, the best way to deal with NEM 3.0 is to make sure that you reduce the dependency on the grid as much as possible. Energy storage systems using batteries allow you to offset the usage of solar power from the moring and mid-day times to peak times post sundown. So by planning your electricity consumption around this, you will be able to reduce the amount of electricity you are taking off the grid thereby saving costs effectively.

Closing Thoughts

NEM 3.0 has been a major source of debate for a few months now. Given the extent of changes being proposed, it is natural to assume that this would massively reduce the benefits rooftop solar owners enjoy today. There are arguments on the other side too as to why the changes make economic sense.

The reality is that the current solar policy has its drawbacks but it has its benefits too. The changes that are proposed intend to balance the scales a bit. But disincentivizing solar is probably not going to help in the long term when there is a dire need to push for more renewable energy adoption everywhere. NEM 3.0 is currently in deliberation and is likely to come into effect later this year. While there are supporters and protestors, the ultimate effect of the program will rely on what final form it takes.

Do Solar Panels Work At Night? Find Out Here

Are you worried that your solar panels will not be relevant during the night?

You expect to have electricity all day and night when you go solar. So, do solar panels work at night? Solar panels can serve you efficiently during the night. Night solar is possible. You don’t have to worry about power outages or lack of sufficient energy when you have solar.

The sun’s power is turned into electric energy with infrared solar cells. The sun is renewable, and the nighttime solar cells would essentially work the same way as their daylight counterparts but in reverse. 

Let’s examine:

  • What Makes up Solar Panels?
  • How do Solar Panels Work?
  • Can Solar Panels Work at Night?
  • How do Solar Panels Work at Night?
  • Does Solar Work in Cloudy Weather?

What Makes Up Solar Panels?


(Source: PopularMechanics)

The solar panel system is made up of smaller solar cells. After absorbing light from the sun, the light is then converted into Direct Current (DC). It is called photovoltaic (PV) energy. Isn’t it amazing that a solar system absorbs sunlight during the day and efficiently serves a home’s energy needs?

Note that you will need either one or more panels, depending on your energy needs. Remember that a single panel can only serve 1 or 2 small appliances. 

Therefore, it is advisable to contact professional solar panel installers who will analyze your energy needs and advise on the solar panels you will need to be installed.  The energy needs are different in every home; some use more and some less. 

The goal is to save on electric bills, which will happen. But as much as solar panels will save you on paying hefty electric bills every month, you should also use these energy-saving tips to ensure that you do not waste any energy. 

Solar panels have been of great significance over the last 20 years, with high adoption rates in the USA. The increase in popularity has stemmed from homeowners and business people.

The high number of installations by homeowners indicates the numerous advantages of solar energy.

Therefore, to create a solar system that can power a house or building, you would require an array with many solar panels connected.

And the thing about solar panels is that they are pretty handy by day when the sun is out shining away. 

On the other hand, most homeowners think it is pretty useless at night in the dark. But that is not the case. So, we are here to show you that your solar panels are fully functional even at night.

According to research done by Jeremy Munday, a professor at the Department of Electrical and Computer Engineering at UC Davis, and a colleague, there is a newly designed solar energy technology that works even at night.

The researchers have designed a new solar cell that can generate up to 50 watts of power per square meter at night under certain conditions. That is about a quarter of a standard solar panel’s output during the day.

Unlike a photovoltaic cell, the infrared solar cell generates power by radiating heat to its surroundings. 

When pointed at the night sky, it emits infrared light because it is warmer than in outer space.

How do Solar Panels Work?

When solar panels convert the sunlight absorbed into DC power, it is sent to the solar system’s inverter. After that, it is converted into alternating current (AC). So your household runs on the AC. The plug is when the energy produced is not consumed; it is sent into battery storage or directly to the electric grid.


(Source: EIA)

As usual, solar panels depend entirely on sunlight to convert to electricity. When you think about installing solar panels in your residential home, make sure that you engage solar installation professionals who will visit your home and do an assessment.

So, what kind of assessment?

They will ensure that the environment is clear of bushes and trees that may tamper with the solar panels while on the roof. Shading tall trees will prevent it from accessing maximum sunlight and may not be efficient for your energy needs.

It is clear that solar panels have taken the world by storm over the last decade, and their popularity will not slow down anytime soon. Although these systems aren’t new, many people still haven’t figured out how the technology works. How do solar panels produce electricity? Does solar work on cloudy days?

From cloudy weather to dwindling day length, it’s not just the dusk that stops them from providing a viable renewable energy source for people in many parts of the world. 

Can Solar Panels Work at Night?

Many people looking to go solar often inquire; can solar panels work at night? It is a concern for many residential homeowners looking to go solar. 

Note that solar panels can fully serve your energy needs efficiently at night. 

Night solar is an essential aspect of every residential home. As a homeowner, you use a lot of energy at night. It is because that is when everyone is at home. 

In addition, all lights are on most of the time, you may need a heater during the cold season, and you could need to dry laundry. Therefore, it’s a great concern that you will need energy efficiency during the night.

Note that your solar panels can generate enough electricity for your night consumption. However, as a homeowner, you will need to invest in batteries for energy storage. 

Imagine that your solar panels can store enough energy for use at night and further sell the extra power to the grid. Then, when you have a good relationship with your utility company, you will sell the extra energy and earn income from it. 

Note that, every night, heat from the sun escapes the earth in infrared radiation to keep the planet at a constant temperature.

The solar intensity at night is high. After the sun heats the solar panels, the energy is stored day and night. Solar panels can work at night because they absorb and produce energy during the day.

After experiencing energy sufficiency during the day and night, homeowners ask, why do I have more energy at night? But, you know what, when there is enough sun during the day, the more the heat is absorbed and converted to electricity. 

With battery storage, you will have a lot of energy to use at night. In addition, California is known for its long sunny days, making it favorable to go solar in California.

Therefore, if you are looking at saving on electric bills, you know that the solar solution is one of the most popular. So, how does this happen? With solar panels installed in your home, you can generate your power. 

In addition, at the end of the month, you will have reduced your electric bill. Your electric bill is reduced because your energy requirements are served by the electricity generated by your solar system. 

So, How do Solar Panels Work at Night?


(Source: Research Gate)

Solar panels tend to make extra power during the day when the sun is out. So, solar customers use solar battery banks to store energy or net metering to balance things out and keep the electricity running after dark.

Also, the new technology is making things easy. The nighttime solar cells can essentially work the same way as their daylight counterparts but reverse. Every night, heat from the sun escapes the earth in infrared radiation to keep the planet at a constant temperature.

Solar Batteries

Every homeowner looking to go solar needs to also think about solar batteries. As you may have discovered, the energy produced on a sunny day may be in excess. 

Therefore, you need to have storage for the extra energy that is not consumed.  It comes in handy during the night when the solar panels are not producing any power. Then, you will be able to use the stored energy. 

Net Metering 

Just note, if you do not have battery storage, there is an option for using your excess energy at night. That is through net metering. With net metering, you don’t have physical energy storage at your home.

Instead, the extra power your solar panels produce is exported to the utility grid during the day. You receive credits for this power, which accumulate in your account.

Later, at night, or any other time you use power from the grid, you can use your credits to offset the energy cost.

In other words, net metering lets you store the economic value of the excess power you produce, which you can use to reduce or even altogether cancel out your electric bills. 

Does Solar Work in Cloudy Weather?


(Source: QuotesGram)

Does solar work on cloudy days? Traditionally solar panels have suffered from the effects of changeable seasons, and they don’t produce energy at night. 

Your solar system can serve you even in cloudy weather. The only difference is that it will not be as effective as a sunny day. Remember, solar depends on sunlight to produce energy; therefore, it will make less on a cloudy day. 

However, we’d love for you to know; although solar panels work better on sunny versus cloudy days, solar panels don’t work best in scorching climates. The output starts to fall if the temperature goes above 77 degrees fahrenheit.

The extra energy that is not used helps when the climate is cloudy and the solar panels do not produce enough energy. You can now see the importance of investing in solar batteries as the energy stored is used when there is minimal sunlight to power the solar.

The sun is renewable, thus helping in the daily production of energy. Today may be cloudy, but tomorrow may be sunny, and the sun will charge your solar panels. 

That is why the government of California has been advocating on going solar to save the environment. They also have enticing solar tax credits and rebates for homeowners who choose to go solar. The sun does not emit harmful emissions, but rather it is clean energy compared to the fossil fuels that produce electricity.  

This is the End of the Article, But It is Only the Beginning of Your Journey

What you should do next is go ahead and inquire about a solar panel installation. Your solar panel system can generate power at night using the new reverse solar panels technology. In addition, solar batteries can store the extra energy produced for use at night.

The sunlight can heat the solar panel hence generating enough energy for use in the household. Therefore solar panels can work at night, and you are also eligible to have more power at night. 

You must engage experts for your solar installation services. Remember that a solar system can serve you for over 20 years. The critical success to efficiency and durability is in the installation. Ensure that you get a solar installation company that knows what they are doing.

Do not be duped by brokers who do shady jobs because you will end up spending more money. Enlightened Solar is your go-to installation company. 

We have many years of experience installing solar in Orange County. We understand solar, and we can advise you on the solar panels you need depending on your energy consumption.

Contact us today for a quote! Let us work together.

Does Installing Solar Panels Increase My Home Value?

Are you concerned about whether the installation of solar panels will have a positive value on your home? 

Solar panels can add value to your property. You don’t have to overthink it, especially if you go solar in Orange County. We will discuss the ins and out of home value increases due to adding solar panels. Many people looking to buy or rent property opt for homes with installed solar panels.

So, how much will your home value increase in 10 years?  Installation of solar panels has grown in the last five years in popularity and it has been attributed to protecting the environment and saving on electric bills

Different regions have different property rates, hence the question; Is there a guaranteed rate of home value? Remember that self-installing solar panels is not advisable, especially if you are going to be doing a roof installation.


(Source: CNBC)

Let’s examine:

  • How Much Do Solar Panels Increase Home Value?
  • How do Solar Panels add Home Value?
  • Are Home Buyers Looking for Homes with solar panels?
  • Advantages and Disadvantages of Buying a Home with Solar Panels
  • Property Taxes
  • Are Solar Panels Worth it for Residential Homes?
  • FAQs on Home Value Addition by Solar Panels

Before installing a residential solar system, you may stop to wonder: Do solar panels increase home value? The answer is a resounding yes.

Here, we’ll go over how many solar panels can increase the value of your home, as well as how that increased value affects property taxes and whether buyers are looking for homes with solar systems. 

With this knowledge, you can make an informed decision about whether solar panels add value to your house.

How Much Do Solar Panels Increase Home Value?

Many homeowners, buyers, and appraisers know that installing a residential solar system can increase a property’s market value and give it a guaranteed rate of home value. 

You need to understand that solar ROI is huge and worth it. So when you think of installing your solar panels, make sure that you find a professional solar company for solar quality installation services to ensure that it is done correctly and will generate the most value.

In addition, a study confirmed that solar installations could increase a home’s resale value by 4.1% of the home’s value. 

Where do these figures come from, exactly? To begin with, consider that homes with solar installations tend to sell for about 4.1% more than homes without. A research study from Lawrence Berkeley National Laboratory reveals an increase in the resale value of approximately $5,911 for each kilowatt of solar power installed.

So, how much do solar panels increase home value? Let us go through a chart that outlines the average figures that increase the home value:

Home Solar System SizeAverage Amount Solar Panels

Increase Home Value*

4 kW$23,644
6 kW$35,466
8 kW$47,288
10 kW$59,110

*Figures based on a study by Lawrence Berkeley National Laboratory.

Note that these amounts are roughly in line with the total cost of a solar panel system, which may just be the incentive you need to take the plunge into solar power finally. The solar ROI is worth every penny that you invest. 

So, what is it that contributes to the home value addition when you invest in the solar system?


(Source: USNews)

How Do Solar Panels Add Home Value? 

Installing your solar panels is the best financial decision you will ever make. Not only will you save on energy consumption, but you also can earn more money with the extra energy sent to the grid. It’s impressive that your utility company can pay you for extra energy transmitted to the grid.

Further, you can apply some energy-saving tips such as switching off the lights that are not in use; it will help you in getting a further reduction in your electric bills. Finally, several factors influence the value-add of solar panels. Some of the most common include: 

Geographic Location

Note that different regions in the U.S.A have diverse electric costs. Therefore, depending on where you live and the cost of electricity, you can rate the value that a solar panel brings to your home. 

In addition, geography can influence the amount of sun exposure you get and the social benefits of installing solar power. For example, Orange County in California has many people investing in solar annually because of the amount of premium sun the area receives. 

Going solar in California is perfect due to the sunny climate all around the year. The available government incentives and tax credits are also a worthy reason to go solar. Due to this, many organizations offer grants for installing solar panels. The goal is to protect the environment by ensuring that every home is well secured with solar panels.

It makes it valuable for residents to invest in solar energy. In addition, the incentives that come with it are an excellent motivator for homeowners to invest in solar.

Local Solar Installation Prices

Another geographic factor is the cost of getting a new system in your region. Let us be real here, do not settle for mediocre installation services! You will need to find high-quality solar installation providers who know their job. 

That said, note that the cost of installing solar panels is not cheap if you hire a company that knows how to do the job well. That all adds up to the home value that solar panels add. 

Buyers find it affordable to buy homes with already installed solar panels. It saves them the hustle of engaging installation companies and supervision and making common solar shopping mistakes while shopping for solar. 

System Output

It is essential to know that a more extensive system with more energy generation will provide more added value. The more the solar panels, the more the kilowatts and thus more energy produced. 

If your system is highly efficient on residential energy needs, it adds more value to your home.

System Age

If you have an older solar system, you’ll need to account for depreciation. Older systems won’t add that much value to your home when you sell it, as there’s a higher chance the buyer will need to do repairs or replace parts sooner rather than later. 

That also sums up with the old roof. Again, do not install solar panels on an old roof because you will not be increasing the home value. But, you may ask, how much does a new roof increase home value?

Note that quality roofing is a sound support system for solar installation. 

System Replacement Value

Along the same lines as system age, how expensive or challenging it is to find replacement parts of your system affects its added value overall. 

Remember that solar panel maintenance is an essential aspect of the investment. Sometimes you will need to replace some parts. How available are they in the market? 

This will determine whether it is worth it to have solar panels. You need to invest in a solar system that guarantees you a quick replacement when needed. Also, self-installing solar panels is not advisable as you may tamper with the quality.

Are Home Buyers Looking for Homes with Solar Panels?


(Source: SEIA)

When figuring how much solar panels would increase your home value, it’s prudent to think just how enticing a solar system is to buyers in your community. Of course, it will vary by geography and, precisely, by local knowledge on solar.

Simply put, buyers won’t be as willing to invest in a solar system if they don’t understand how solar panels work or how they can benefit from them. For instance, the residents of California know the importance of buying homes with already installed solar panels.

There has been education on the importance of installing solar panels. Therefore, everyone is inclined to invest in the system. In addition, there are grants for installing solar. 

That said, some data shows homeowners to be pretty open to energy efficiency features, for the most part. Solar panels save you on electric bills, protect the environment, earn you money, and most importantly, if you decide to sell your home, it will be more valuable.

Some earlier data from the National Renewable Energy Laboratory shows that homes with solar panels sell 20% faster and 17% more than those without. 

Advantages and Disadvantages of Buying a Home with Solar Panels

The good news for home buyers is that even if solar panels raise the price of your new home, their presence is more positive than negative. It is because solar panels are generally considered a good return on investment. 

Since their upfront costs are usually much higher, having them already in place is not likely to incur any further investment above a raised asking price.

Investing in solar energy is one of the best things you can do for the planet. They reduce electric bills and foster energy independence. You’ll also want to inspect and service the panels before you move in to ensure that they are in good working condition.

Property Taxes

When your property values go up, that usually means that your property taxes increase as well. 

The good news is that many states like California offer exemptions and tax credits, meaning that when you install a solar system, your property taxes do not go up, even if your property value rises.


(Source: CaliforniaEnergyCommission)

Are Solar Panels Worth It for Residential Homes?

As you weigh the advantages of solar, it makes sense to consider the overall impact on your property value. You’ll also want to take into account factors including:

  • Your Utility Bills Each Month 

If you live in an area with high average electricity rates, you’ll get a better return on your solar energy investment. Remember to apply energy-saving tips to save more energy.

  • The Amount of Sunlight Your Home Gets Throughout the Year 

Some homes are better positioned for solar panel installation than others. If your home is situated at an optimal angle for harnessing the sun’s energy, it makes more sense to go solar.

  • Financial Incentives Available to You 

All American homeowners are eligible for the federal solar tax credit. Still, many states and municipalities have added rebates, low-interest loans, and other financial incentives for their residents as well. So make sure that you save and gain. 

As we finalize, we’d love to take you through some of the Frequently Asked Questions on solar panels increasing home value.

FAQs on Home Value Addition by Solar Panels

Do solar panels hinder the resale value of your home?

No. Installing a home solar system increases the resale value, particularly if you have a high-efficiency system that helps lower monthly energy bills.

Multiple studies have shown that buyers are looking for more energy-efficient homes to reduce their carbon footprints and help save on electricity bills.

Do Bigger Solar Installations Present a Better Value-add than Smaller Systems?

Bigger solar installations may present a better-added value than smaller systems. However, it’s not the number of panels that matters so much as the power output in many cases. The solar panel needs to present the required efficiency in the home. 

What Value Does Solar Add to the Home?

A few studies have shown that solar installations increase a home’s resale value by about 4.1% of the home’s value. However, this can vary quite a bit from one geographic location to another.

Am I Able to Save Money with Solar Panels?

While the initial investment may be steep, solar panels can help to reduce or even eliminate your monthly electric bills. These ongoing energy savings are an excellent addition to property values.

You Have All the Reasons for How Solar Energy Increases Your Home Value. Now, All You Need To Do is to Go Solar! 

Do solar panels increase home value? We believe you now have an extensive answer. Investing in solar panels gives you a guaranteed rate of return at home value. 

Therefore, it is a worthy cause if you think of installing your solar panels. The solar ROI that you get is worth every penny.

Note that solar panels add value to your house. All you need is a high-quality installation company to work on your solar installation. They will also assess the roofing and the environment to ensure maximum efficiency from your system.

If you are interested, contact Enlightened Solar for all your installation needs. You will also get good advice depending on your home energy needs. 

At Enlightened Solar, we know the need to have an efficient solar panel for your home. We shall also advise you on the solar tax credits and rebates you can apply; let’s make your work easy.

Contact us today for any queries and also get a quote!