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July 2023 NEM 3.0 Update

California, renowned as the Golden State, has been at the forefront of the solar industry, playing a vital role in its sustainable living efforts. Recently, in April 2022, the implementation of NEM 3.0 brought about changes in net metering rates, impacting the profitability for homeowners selling excess energy to the grid.

Similar shifts in net metering have occurred in countries like Belgium and Germany, where the transition to self-consumption initially caused a temporary decline in solar demand, followed by remarkable growth. For example, in Germany, the end of net metering in January 2021 led to a significant surge in demand for solar + storage installations, with 70% of new installations incorporating a home battery. For homeowners, investing in a solar + storage system offers long-term benefits. Fortunately, there are options available to help reduce the upfront cost, such as the Reduction Act, which introduced rebates for energy efficiency retrofits, providing financial assistance to homeowners. Additionally, offering diverse solutions to accommodate various budgets is crucial.

Under NEM 3.0, the export rates for solar energy will fluctuate throughout the day. Homeowners can optimize their revenue by selecting a system that automatically charges the battery before peak times. Load shifting can also enhance self-consumption, as heavier electrical loads can be scheduled to run when solar production is at its highest.

Another consideration is the option to oversize PV arrays. By generating more power even during low light conditions, homeowners can achieve higher energy yield and faster return on investment through time of use savings and load shifting.

To excel in the self-consumption market, installers should carefully consider the available battery options. DC-coupled batteries, for instance, offer higher efficiency and eliminate the need for additional breakers, saving time and costs for both installers and homeowners. Faster project completion ultimately benefits the installers' bottom line.

In summary, despite the initial market uncertainty brought about by NEM 3.0, California's transition to a self-consumption solar market opens up new opportunities for homeowners and installers alike. It paves the way for sustainable living and reinforces the state's leading role in the solar industry.

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