NEM 2.0 vs NEM 3.0: What Changed and What It Means

California's transition from NEM 2.0 to NEM 3.0 in April 2023 sparked confusion and concern among homeowners considering solar. Here's a clear, side-by-side breakdown of what actually changed.

Side-by-Side Comparison

Export Credits

• NEM 2.0: Credited at retail rate ($0.30–$0.50/kWh)
• NEM 3.0: Credited at avoided cost ($0.05–$0.08/kWh average)

Rate Structure

• NEM 2.0: Time-of-Use with high export value
• NEM 3.0: Hourly export rates based on ACC values

Battery Importance

• NEM 2.0: Optional — solar-only was very profitable
• NEM 3.0: Near-essential for maximum savings

System Payback (IOU customers)

• NEM 2.0 (solar only): 4–6 years
• NEM 3.0 (solar only): 8–10 years
• NEM 3.0 (solar + battery): 5–7 years

Grandfathering

• NEM 2.0 customers: Grandfathered for 20 years from interconnection date
• New installs (after April 2023): NEM 3.0 applies

The Bottom Line

NEM 3.0 made solar-only systems less attractive but made solar + battery systems the new standard. For most California homeowners on PG&E, SCE, or SDG&E, solar + battery under NEM 3.0 delivers payback in 5–7 years and savings exceeding $75,000 over 25 years.

The real loss would be waiting. Utility rates are climbing 5–8% per year. Every year you delay, you lose thousands in potential savings.

See what you could save or check if you qualify.