‘Out of step with the national pro-solar agenda’: California to slash net metering payments

December 16, 2022
Facebook
Twitter
LinkedIn
Reddit
Email
The legislation will cut export rates for power sold back to the grid by around 75%. Image: Sunrun.

NEM 3.0, the latest iteration of California’s rooftop solar net metering scheme, was passed on Thursday by the California Public Utilities Commission (CPUC). Vocal public debate surrounded the legislation before the vote as solar industry workers and representative bodies called for revisions to the proposed decision.

The now-ratified net metering legislation purports to incentivise battery storage systems in order to bolster grid security and manage loads in peak summer months. To that end, the proposal offers time-flexible export rates that “have significant differences between peak and off-peak prices to incent battery storage and load shifting from evening hours to overnight or midday hours”, the CPUC said in a release.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

To account for the theoretical uptick in storage systems, the legislation will cut export rates for power sold back to the grid by around 75%.

This has been the main focal point of the criticism of NEM 3.0, with many saying that the legislation will make solar less affordable and cause a drop-off in installations. Indeed, PV Tech Premium covered reactions ahead of the vote, citing a study showing that significant net metering changes in other US states have had adverse effects on solar markets.

“The CPUC vote is a loser for California on many levels. For the solar industry, it will result in business closures and the loss of green jobs,” said Bernadette Del Chiaro, executive director at the California Solar and Storage Association (CALSSA). “For our grid reliability needs, it fails to promise robust growth in battery storage. And for California’s race to clean energy, it puts us behind our goals and out of step with the national pro-solar agenda.”

Another key concern has been the time the CPUC has allowed for the market to transition from predominantly solar-led to solar and storage. “With high costs, supply chain constraints, inflation and permitting and interconnection delays and challenges, it will take years before the storage market can match the solar market,” CALSSA said in a press release.

Sean Gallagher, vice president of state and regulatory affairs at trade body the Solar Energy Industries Association (SEIA), echoed these concerns, saying: “The solar and storage industry remains concerned that the transition from net metering to the new net billing structure is too abrupt and threatens to slow the deployment of rooftop solar in California.”

Speaking to PV Tech Premium last week, vice president of public policy at solar installer Sunrun, Walker Wright said: “We want to be installing solar plus batteries, but we also know that there simply aren’t enough batteries out there to deliver what customers want.”

Residential batteries are yet to be scaled to the levels of solar modules, and interconnection, permitting and ongoing supply chain issues have held the storage market back.

The CPUC said that NEM 3.0 includes provisions for expanding solar and storage to low-income Californians, with extra bill credits to the tune of US$630 million set aside to support installations in low-income communities.

CPUC commissioner John Reynolds said: “NEM has left an incredible legacy and brought solar to hundreds of thousands of Californians, but it is also profoundly expensive for non-solar customers and was overdue for reform.

“The future needs a solar programme designed around the value of solar to the grid and one that encourages true carbon reductions at peak energy times, which is after the sun goes down, by creating better incentives for customers to pair solar with batteries.”

In the shorter term, a report from SEIA said that with implementation expected in April of next year, it expects high levels of solar installations until Q3 2023 as customers who submit an interconnection application before the deadline will qualify under NEM 2.0. The association expects 2024 to be the first full year of impacts from the new NEM 3.0 policy, contracting the California market by 39% and causing a 3% contraction in the national market.

California’s residential solar market is regarded as a litmus test for the national situation in the US, and thus has ramifications globally.

“People are rushing to go solar, because they’re afraid the bottom is going to drop out from under the market in three months, and that’s not healthy. That’s not a recipe for continuous stable growth,” said Bernadette Del Chairo.

21 October 2025
New York, USA
Returning for its 12th edition, Solar and Storage Finance USA Summit remains the annual event where decision-makers at the forefront of solar and storage projects across the United States and capital converge. Featuring the most active solar and storage transactors, join us for a packed two-days of deal-making, learning and networking.
16 June 2026
Napa, USA
PV Tech has been running PV ModuleTech Conferences since 2017. PV ModuleTech USA, on 16-17 June 2026, will be our fifth PV ModulelTech conference dedicated to the U.S. utility scale solar sector. The event will gather the key stakeholders from solar developers, solar asset owners and investors, PV manufacturing, policy-making and and all interested downstream channels and third-party entities. The goal is simple: to map out the PV module supply channels to the U.S. out to 2027 and beyond.

Read Next

Premium
October 20, 2025
New data suggests the traditional assumptions behind hail stow modelling may be underestimating the likelihood of damage to a PV system.
October 20, 2025
New federal policies in the US will 'cloud' the country’s renewable energy sector, according to a webinar hosted by Wood Mackenzie.
October 20, 2025
Details of tariffs on US imports of polysilicon products may be announced as early as the end of this month, according to a note from investment bank Roth Capital.
Premium
October 17, 2025
According to Ronak Maheshwari of CRC-IB, there has been a struggle for US renewable power projects to secure necessary equity .
October 17, 2025
Norwegian renewable energy firm Scatec has signed lease agreements for 64MW of solar PV and 10MWh of energy storage capacity in Liberia and Sierra Leone.
October 17, 2025
A group of over 20 US states are suing the Trump administration for the cancellation of the US$7 billion Solar For All Scheme.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 21, 2025
New York, USA
Solar Media Events
November 25, 2025
Warsaw, Poland
Solar Media Events
December 2, 2025
Málaga, Spain
Solar Media Events
February 3, 2026
London, UK