- NEM 3.0 Changes and Who They Affect
- The Legal Journey: From Courts of Appeal to the California Supreme Court
- Implications for Rooftop Solar Owners and the California Market
- Policy Debates, Industry Responses, and What To Watch Next
- Frequently Asked Questions
- NEM 3.0 Shifts Solar from Exports to Storage and Independence
California's NEM 3.0 Fight
- NEM 3.0 Changes and Who They Affect
- The Legal Journey: From Courts of Appeal to the California Supreme Court
- Implications for Rooftop Solar Owners and the California Market
- Policy Debates, Industry Responses, and What To Watch Next
- Frequently Asked Questions
- NEM 3.0 Shifts Solar from Exports to Storage and Independence
California is the nation’s leader in solar power, thanks to its year-round sunshine and historically generous solar rebates. With net metering (NEM), homeowners can earn credits by selling unused solar power back to the California grid. For years, these rebates made rooftop solar panels an affordable and attractive option.
However, the introduction of NEM 3.0 dropped compensation rates by roughly 75%, sparking legal challenges and changes in the solar industry. Learn how NEM 3.0 changes might affect you, and their implications for the future of solar.
NEM 3.0 Changes and Who They Affect
On December 15, 2022, the California Public Utilities Commission (CPUC) approved a new version of net metering, referred to as NEM 3.0. This policy went into effect on April 15, 2023.
Under previous net metering rules, residents could earn credits at a rate close to the retail rate for excess electricity sent back to the grid. NEM 3.0, on the other hand, ties compensation to “avoided costs,” a complex formula that accounts for the time of day, the month, and grid demand. This means customers receive rebates according to 576 different rates instead of a simple one-to-one credit. On average, payouts are about 75% lower than they were before.
NEM 3.0 makes it less financially rewarding to send power back to the grid. Instead, pairing solar panels with a battery is the smartest way to maximize savings. By storing excess energy and using it later, you can avoid exporting electricity at lower rates and reduce your reliance on utility companies.
So, do these changes affect you? It depends on when you installed solar. If you installed solar before NEM 3.0 took effect on April 15, 2023, your system is locked into the older, more favorable rates for the duration of your contract (often 20 years). But anyone applying after April 15, 2023, falls under the new rules.
EcoFlow DELTA Pro 3 Solar Generator (PV400W)
The Legal Journey: From Courts of Appeal to the California Supreme Court
While NEM 3.0 increased interest in battery storage, it sparked frustration with both consumers and nonprofits alike. When the CPUC first approved NEM 3.0, the changes slashed compensation rates by as much as 75%. While existing customers could stay at their current rebate rate, new applicants faced far smaller payouts for exported power.
Environmental and solar advocacy groups quickly filed lawsuits, arguing the policy unfairly penalized homeowners, especially those in disadvantaged communities.
At first, the California Courts of Appeal upheld NEM 3.0. However, in August 2025, the California Supreme Court required the lower court to revisit its decision. The Supreme Court questioned whether slashing payments by 75% met the legal standard of fairness for consumers. This ruling didn’t immediately overturn NEM 3.0, but it forced the Courts of Appeal to reconsider whether the policy truly aligns with state law and energy equity.
In the meantime, the fight over NEM 3.0 is far from over. While the Supreme Court’s ruling was a win for solar advocates, the case now returns to the lower courts for a second look. In the meantime, homeowners can expect to earn fewer credits.
Implications for Rooftop Solar Owners and the California Market
A study by the Berkeley Lab revealed a sharp decline in solar quotes overall, a year after NEM 3.0 went into effect. For many homeowners, the economics simply didn’t make sense with the rebate reductions. In the case of those who installed solar anyway, prices climbed by about 17%. However, the study also found that NEM 3.0 doubled the rate of battery installations, jumping from just 10% of quotes to 60%. Installations now average more than 5,000 batteries per month across the state.
While NEM 3.0 makes its way through the courts, homeowners are focusing on storing the energy they produce instead of selling it back to the utility company. In fact, you don’t need to get an expensive rooftop solar quote at all. The EcoFlow RIVER 3 Max Plus + 220W Solar Panel is a more affordable and flexible solution that allows you to harness the sun's power for your home. The EcoFlow DELTA Pro 3 Solar Generator (PV400W) is portable but powerful enough to run multiple appliances on a single charge. Since the system comes with a portable solar panel array, you can enjoy cheap energy either at home or while on the go.
Policy Debates, Industry Responses, and What To Watch Next
Solar installations are down, but demand for storage is on the rise. You can expect to see more solar installation companies focusing not just on the panels, but on storage solutions, too. In terms of policy, NEM 3.0 could harm energy equity. In the meantime, look for the Courts of Appeal’s updated ruling on NEM 3.0 and its calculations for export credits.
Also, you can still leverage the power of the sun to trim utility bills and prep for potential power outages. If you’re minimizing grid exports, route that sunlight to the EcoFlow DELTA 3 Plus Solar Generator (PV220W) instead. This modular, lightweight solar system has a much lower upfront investment than a whole-home install, and you don’t have to worry about NEM 3.0 at all.
Frequently Asked Questions
When Did Nem 3.0 Take Effect?
NEM 3.0 went into effect on April 15, 2023, although California lawmakers passed it on December 15, 2022. If you installed a solar system before the April 15 cutoff, you don’t have to comply with NEM 3.0. However, all systems installed after that date fall under NEM 3.0 rules.
Does Nem 3.0 Apply To Existing Solar Customers?
If you installed your system before April 15, 2023, NEM 3.0 doesn’t apply to you. Instead, you’ll follow either NEM 1.0 or NEM 2.0 rules. These rules will apply to you for the duration of your contract, which is typically for 20 years.
NEM 3.0 Shifts Solar from Exports to Storage and Independence
While NEM 3.0 changed California’s solar market, it didn’t kill it entirely. By cutting export credits by 75%, the state encouraged more people to store energy instead of selling it back. The legal fight over NEM 3.0 is still ongoing, but in the meantime, homeowners should adapt to a new reality where storage plays a bigger role in solar.
Instead of focusing on more permanent rooftop solar installations, it’s better (and more affordable) to generate and store energy for your family’s personal use. Think beyond panels alone: pair solar with a reliable backup system like the EcoFlow DELTA Pro 3 Solar Generator (PV400W) to protect against outages and maintain your energy independence.