NEM 3.0 Battery & Storage Options

Significant changes are coming to California solar’s net-metering terms beginning mid-April 2023. Under NEM 3.0, solar customers who sign an interconnection agreement with their utility will receive .05 – .08¢ per kWh of power sent back to the grid – about a 70% reduction from current NEM 2.0 terms.

As we previously reported, utility companies in California want to be relieved of their energy management duties. And they have successfully argued their position to the California Public Utilities Commission (CPUC). As a result, consumers must begin storing their excess energy in batteries at their own expense. Otherwise, the cost of going solar alone is disincentivized.

The main problem with this scenario is that batteries are expensive, and choices are limited.

The Costs of NEM 3.0

DIY Energy Management

solar system plus battery storage for NEM 3.0

Let’s say someone wants to install an 8kW solar system using Enphase microinverters and batteries. The cost of the solar system will be around $28,000 before the 30% Federal tax credit. To add a 10kWh battery backup and all the necessary equipment and electrical modifications, the cost is another $18,000.

10kWh is the bare minimum of storage the average consumer will need. Realistically, you’ll want twice that amount of storage or more. Adding 20kWh of storage will be an additional $28,000 before the Federal tax credit and other battery incentives.

Bottom line: Solar customers will need to invest an additional $20,000 – $30,000+ for a sufficient battery system that could be obsolete in 5-10 years.

What if an electric vehicle could power your house instead of batteries?

Within the next decade, the majority of us will be driving electric vehicles (EVs). Most will have 80-100 kWh of battery storage or more. And even lower-range EVs will have at least 60 kWh.

The average person drives 20-30 miles a day. So a large portion of their EV’s battery will be available to feed power back to the home during peak hours.

EV owners can charge inexpensively during daylight hours when there’s plenty of solar power and then feed back to the grid at a small profit during peak hours. A small battery setup may still be needed when no vehicles are available.

An Enphase battery system with 60 kWH’s storage would cost over $60,000 today. However, you can buy a Nissan Leaf with a 60 kWh battery and two-way charging capability for around $42,000. Most, if not all, EVs will offer two-way charging in the future. And as EVs get less expensive, two-way charging will offer a solution that works for solar customers and utilities.

solar system plus electric vehicle storage for NEM 3.0
It’s too soon for NEM 3.0.
The current cost of adding batteries is too high for the average consumer. In our opinion, California should keep NEM 2.0 in place until batteries and EVs with two-way charging are available and more affordable.

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