California’s energy landscape is undergoing significant changes, with recent updates to the Net Energy Metering (NEM) program reshaping how residents interact with the grid. While these updates are primarily aimed at solar customers, those without solar panels or backup batteries may also feel the effects. If you’re still relying solely on traditional grid power, understanding how NEM changes could impact your energy bills—and exploring the benefits of switching to solar with a backup battery—can help you make a smart choice for your future.

What is NEM, and What Has Changed?

Net Energy Metering allows homeowners with solar panels to earn credits for excess electricity they generate and send back to the grid. Historically, solar customers received nearly full retail compensation for this excess power, which made going solar an attractive option. However, with the introduction of NEM 3.0 in 2023, the rates for exported energy have dropped significantly.

Under the new rules, compensation for sending electricity back to the grid is now based on the "avoided cost" to utilities rather than the retail rate. While these changes primarily affect how solar customers are credited, they can also indirectly impact non-solar customers, who may face rising electricity costs as utilities seek to maintain grid stability and recoup revenue.

How NEM 3.0 Affects Customers Without Solar

For homeowners without solar systems or battery storage, the NEM 3.0 changes may seem unrelated, but they could lead to several indirect consequences:

1. Higher Electricity Bills: California utilities may continue to raise electricity rates to cover the costs of maintaining the grid and meeting clean energy goals. As energy costs climb, non-solar customers could see a significant increase in their electricity bills, especially during peak hours when electricity is more expensive.
2. Time-of-Use (TOU) Rate Increases: As part of the NEM changes, utilities are likely to rely more on Time-of-Use (TOU) billing, where electricity prices vary based on the time of day. For customers without solar, this means paying higher rates during peak demand times (typically late afternoon and evening). Without a way to generate and store your own energy, these higher TOU rates can significantly impact monthly utility costs.
3. Grid Strain and Power Outages: As more people adopt electric vehicles and energy-intensive devices, the grid will face increasing strain, leading to a greater risk of power outages. Non-solar customers may experience more frequent disruptions, especially during heatwaves, wildfire seasons, or Public Safety Power Shutoffs (PSPS). Without a backup battery, there’s no way to keep essential appliances running during these outages.
4. Reduced Control Over Energy Costs: Non-solar customers remain fully dependent on utility companies for their energy needs, with little control over their electricity costs. Any future rate increases, additional NEM updates, or policy changes will directly affect their energy bills.

The Benefits of Going Solar with a Backup Battery Now

Despite the NEM changes, switching to solar energy remains a wise decision, and adding a backup battery can help you maximize the benefits. Here’s why going solar with battery storage is still the smart choice for California homeowners:

1. Lock in Lower Energy Costs: Solar panels allow you to generate your own electricity, reducing your reliance on the grid and lowering your monthly energy costs. By storing excess solar power in a backup battery, you can use your own stored energy during peak demand hours, avoiding high TOU rates.
2. Protection Against Future Rate Increases: Electricity prices in California have steadily risen over the years, and there’s no sign of that trend slowing down. By going solar now, you can protect yourself from future rate hikes and keep your energy costs predictable for years to come.
3. Qualify for Existing Incentives: There are still federal and state incentives available for installing solar panels and energy storage systems. Programs like the federal solar tax credit and California’s Self-Generation Incentive Program (SGIP) can help reduce the upfront cost of going solar, making it more affordable to make the switch. These incentives may not last forever, so acting now can help you take advantage of them before they change.
4. Energy Resilience During Outages: California’s grid is increasingly strained by extreme weather events, PSPS, and other factors. Solar panels paired with a backup battery can keep your lights on and essential devices running during grid outages, providing peace of mind and safety for your household.
5. Increase Your Home’s Value: Installing a solar system with a backup battery can increase your home’s value. Studies show that homes with solar systems typically sell for more than those without, making it a wise investment that pays off in both short- and long-term savings.

Possible Savings by Going Solar with a Backup Battery

Here’s what you could save by switching to solar:

• Significant Monthly Savings: Solar systems can reduce electricity bills by 50% or more, depending on the size of your system and household energy use. With a backup battery, you can further optimize savings by using stored energy during high-cost periods.
• Avoid TOU Rates: By storing excess solar energy in a battery, you can use your stored power during peak TOU rate periods, avoiding the higher costs associated with grid electricity at those times. This can save hundreds of dollars annually.
• Long-Term Financial Benefits: The cost of doing nothing can add up quickly. Over the next 20 years, electricity rates are expected to rise substantially, making the investment in solar energy even more worthwhile. The sooner you install a solar system, the greater your lifetime savings will be.

Why You Should Act Now

California's energy policies are always evolving, and while NEM 3.0 is the latest update, it likely won't be the last. Here’s why acting now, rather than waiting for potential future changes, is crucial:

1. Lock in Incentives While They’re Still Available: Incentives for solar and battery installations may be reduced or phased out over time. Taking advantage of current programs can save you thousands of dollars on the cost of your system.
2. Avoid Future Policy Changes: There is no guarantee that future NEM updates will be more favorable than NEM 3.0. In fact, compensation for solar energy could be further reduced in the future, making it even more important to go solar now while you can still receive a fair value for your excess energy.
3. Start Saving Immediately: The sooner you switch to solar, the sooner you can start reducing your electricity bills and protecting yourself from rising rates. Delaying could mean missing out on months or even years of potential savings.
4. Prepare for Energy Resilience Now: With California’s grid facing more strain and an increasing number of planned outages, having a backup battery will help you stay powered during emergencies. Don’t wait until the next blackout to realize the importance of energy resilience.

ES Solar Can Help You Make the Switch

Navigating the NEM 3.0 changes and choosing the right solar and battery solution can be overwhelming, but ES Solar is here to guide you every step of the way. With over 15 years of experience in the industry, we specialize in designing custom solar and battery storage systems tailored to your needs. Our team will help you maximize your savings, take advantage of available incentives, and ensure your home is ready for a resilient energy future.

Contact us today for a free, no-obligation solar assessment and learn how you can start saving immediately. Don’t wait—protect yourself from rising electricity costs and future NEM changes by going solar with a backup battery now!