Net Billing 3.0 Will Bring Major Changes to Solar in California

June 7, 2024
5 min read
a house with solar on the roof

If you currently have or are considering investing in solar panels, it’s critical to understand the latest Net Billing 3.0 proposal from the California Public Utilities Commission (CPUC).

Combined with a drastic bill credit reduction for customers who sell electricity back to the grid, this proposal significantly increased the payback time for a solar project. The Net Billing 3.0 proposal is expected to go into effect on April 15, 2023.

Net Billing 2.0 Vs. Net Billing 3.0

Net Energy Metering started in 1996 with California Code SB 656. The original idea was to stimulate solar growth by incentivizing renewable energy installations with bill credits for selling energy back to the grid.

Net Billing 2.0 Net Billing 3.0
Average per kWh bill credit $0.25-0.30 $0.05 - 80% reduction in credit value
Average savings per month for a 10kw system $204 $48-64 - 70% reduction in savings per month
Average return on investment Six years for residential projects At least nine years for residential projects

Net Billing 3.0 Could Remove The Economic Incentives Of Residential Solar Installations

If passed, Net Billing 3.0 will:

  • Reduce net metering bill credits: Net Billing 3.0 would reduce the average $0.25–0.30 per kWh bill credit to about $0.05 per kWh, an 80% reduction.
  • Increasing payback period: With substantial monthly savings under Net Billing 2.0, current customers can expect to break even on their solar investment in as little as six years. New customers with identical systems operating under Net Billing 3.0 will take nine years to see a return on their investment.
  • Increase installation costs: Reducing the value of grid-exported energy forces solar-only systems to be built smaller to maximize onsite energy consumption. Unfortunately, this wipes out the cost-effectiveness of large-scale projects and leads to higher installation costs.

Net Billing 1.0 & 2.0 Grandfathering

Customers with a signed contract and a completed application before the expected April 15, 2023, deadline will be grandfathered in under Net Billing 2.0 for 20 years.

What Can Non-Solar Customers Do Before Net Billing 3.0 Goes Into Effect?

Since passed on Dec. 15, 2022, Net Billing 3.0 will take effect on April 15, 2023. In other words, the time to go solar is now!

Battery storage will make the Net Billing 3.0 rates much more cost-effective for customers, so we encourage all new solar customers to add a battery to their solar system.

Contact TENCO SOLAR at (888) 507-6937 today to start the process of adding solar to your home or business.

We can help grandfather you into Net Billing 2.0 to maximize the benefits of your solar panels for years to come.

Have a Solar project in mind?

With over two decades of expertise in designing and installing solar systems for residential and commercial properties across California, TENCO SOLAR is the perfect partner for your upcoming solar project.