Why California’s NEM 3.0 is a lemon but short-term lemonade for Florida

This month’s blog includes good and bad news. Here is the situation in brief: in December of 2022, the California Public Utilities Commission (CPUC) voted to pass the controversial new net energy metering policy, NEM 3.0; the new net metering rules took effect on April 15, 2023. These new rules dropped the value of solar energy credits earned by homeowners with new solar arrays. Since then, the rate of solar installations has dropped by a whopping 80% and tens of thousands of layoffs have occurred. Yes, that’s the bad news. The good news for Floridians interested in adopting solar is that, due to the drastically slowing market in California, NEM 3.0 has caused a glut of solar panels on the market; thus, installed costs for a solar energy system are fairly low right now.

Recent research by EnergySage found that prices for rooftop solar steadily declined in 2023, returning to 2020 levels, coupled with a significant rise of installed residential storage systems. With Florida Power & Light’s rates as high as they are and a surplus of equipment on the market, we believe that now is the best time to be installing solar!

According to Energy Sage, here are the key takeaways with regard to NEM 3.0:

  • The changes to California’s net metering policy cut the value of solar energy credits by about 75% for PG&E, SCE, and SDG&E customers.
  • Existing solar customers – and people who went solar before NEM 3.0 went into effect (through April 14, 2023) – were grandfathered into their original net metering policy.
  • Solar shoppers who submitted interconnection applications after April 14, 2023 fall under NEM 3.0. The economic outlook for their solar installations will be more favorable if they incorporate energy storage, which still enables solar users to offset power bills by as much as 70-90%.

We know the battle to maintain beneficial net metering rates are far from over in our state. Most recently, in 2022, the Florida House and Senate passed H.B. 741/S.B. 1024, which would have authorized public utilities to impose additional charges on customers to recover lost revenue from residential solar generation. Of course, this legislation had strong investor-owned utility support – news reporting provided proof that much of HB 741 was authored by FPL. Thankfully, Gov. Ron DeSantis vetoed the bill when it reached his desk.

So, while California NEM 3.0 should serve as a dire warning to renewable energy advocates and consumers seeking energy choices here in Florida rather than state-mandated monopolies, current market conditions make going solar especially beneficial. According to Consumer Affairs, the average cost of a 10-kW solar energy system is just over $25,000; factor in the 30% federal ITC (Investment Tax Credit), and the payback period for the system can be as low as eight years.

Please feel free to give us a call at 941-359-3700 if you would like to learn more about solar energy and/or to get a free quote for a solar energy system!

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