In recent years, there has been an increasing interest in solar energy in California. Not only is solar energy a sustainable and renewable source of energy, but it can also be a smart investment for homeowners.
There are significant changes coming to net metering in California. Under NEM 2.0, which is the term for the billing arrangement where customers with solar panels get credit for their systems’ excess energy, customers received a one-for-one credit for excess energy they produced. This meant that for every kilowatt-hour (kWh) of electricity they fed back into the grid, they received a credit for one kWh on their utility bill.
Under NEM 3.0, which was approved at the end of 2022, the credit rate for excess energy production will be generally reduced and time-varying. This means that the value of the credit will vary depending on the time of day and the level of demand on the grid. NEM 3.0 will also include changes to the interconnection process for new solar customers, as well as new fees and charges related to grid maintenance and other costs.
The NEM 3.0 regulations go into effect on April 14, 2023, so quick action is important for a solar system to be “grandfathered” in under NEM 2.0.
There are a few ways to finance the installation of a solar upgrade. One way is for the homeowner to buy it, either by paying cash or financing through a solar specific lender. The main financial benefits of this are lower energy bills, possible tax incentives and rebates. Additionally, any excess energy produced by the solar system can be sold back to the utility company through a process called net metering.
Another way is by renting. With a leased system, the homeowner pays a monthly fee and the solar company owns the panels (they are also responsible for maintenance and repairs). The homeowner benefits from lower energy bills and may have the option to buy the panels at the end of the lease. Importantly, with a leased system the homeowner does not receive any tax incentives or rebates.
It’s a good idea to consider future-proofing for your home's eventual energy needs. If you have plans to add an electric vehicle to the household, you will need a larger solar system to accommodate the increased demand.
Battery storage ensures a stable household electrical supply. There are a few options, lithium-ion and lead-acid batteries are the most popular.
For additional information or to receive a recommendation for a solar provider, contact us.
