Three Ways Batteries Can Help you Save in NEM-3.0

Why is Battery Storage so Important in NEM-3.0?

For many California homeowners, solar energy has been a wise financial investment. Despite the recent changes brought by NEM-3, solar can still yield significant returns. However, pairing solar with batteries has become crucial to ensure financial viability and maximize return on investment.

The NEM-3.0 policy brings big changes to energy costs and how solar users save money. One major shift is the reduction in export rates, pushing homeowners to store and use their solar energy wisely. With a cap on solar size at 150% of the past year's energy use, efficient use of solar power is key to maximizing savings. Home batteries becomes crucial here, allowing homeowners to sell energy back to utility companies for maximum credit using the new hourly avoided cost calculator. Moreover, when combined with solar, batteries enable homes to function independently from the grid. This not only boosts financial savings by avoiding pricey grid energy but also offers a reliable, self-sustained energy solution.

 

Best Battery Strategies for NEM-3.0

Under NEM-3.0, homeowners are encouraged to store and use the solar energy they produce. The size of your solar array and battery bank, as well as the capabilities of your inverter, play a crucial role in determining the best strategy for maximizing financial savings and return on investment. Since exporting solar energy offers minimal compensation, the capacity of your solar array should align with your battery storage size. A larger battery allows for a bigger solar setup since it can store the additional energy produced. Generally, smaller battery banks (10-20 kWh) are effective for avoiding peak energy prices, while larger banks (>20 kWh) are optimal for selling energy back to the utility company at maximum credit and eliminating reliance on grid energy.

 

Selling Energy Back to the Utility Under NEM-3.0

Exporting solar energy under NEM-3.0 now involves the Avoided Cost Calculator (ACC), which tracks closely with wholesale energy prices at the time of export. Generally, energy is cheapest during the day when grid demand is low and solar energy is plentiful. However, energy prices spike in the evenings as people return home and grid demand surges, but no solar energy is available. Consequently, daytime solar exports receive minimal credit, whereas energy stored in batteries and sold back during the evening is credited higher. The ACC provides varying export rates for each hour, month, and year for up to 30 years. Notably, some September evenings see such high grid demand that utilities offer as much as $2.5/kWh—up to 25 times more than the credit during some daytime hours in April.

At StackRack, we typically advise against the battery strategy of strictly exporting energy under NEM-3.0 for most homeowners. This approach is highly reliant on utility companies' needs and export policies. With new NEM-3.0 interconnections, homeowners can secure export rates for nine years, as long as they don't sell their home. After this period, the rates will depend on the current ACC export rates, which will likely be lower than the rates today. Therefore, while this strategy could be advantageous for the first nine years, its financial benefits beyond that time are uncertain.

 

Self-Consumption

Self-consumption focuses on generating, storing, and using your solar energy to reduce reliance on utility companies. You only export surplus solar energy when your batteries are full and production exceeds what your home needs. The less energy you draw from the grid, the more grid-independent you become.

During the day, any extra solar energy not used by your home is stored in batteries for nighttime use. With a large enough battery bank, your home can run on stored energy overnight and recharge in the morning as the sun rises, essentially making it feel like you're off-grid while still having grid access when needed.

On cloudy days when solar production is low, you can program the system to charge your batteries during "off-peak" times when grid energy is cheapest, a practice known as energy arbitrage. This can help homeowners with smaller solar systems and significantly reduce your electric bill, especially in areas with high peak energy prices. Advanced hybrid inverters like Sol-Ark and Luxpower excel at self-consumption, allowing you to monitor imported and exported grid energy, solar production, and battery activity through a web portal or app.

We generally recommend this strategy for most homeowners as it offers control over home energy use and shields against utility rate hikes and net metering policy shifts, ensuring long-term financial stability.

 

Going Off-Grid Completely

Many California homeowners are increasingly opting to disconnect from utility companies altogether. Although a legal grid connection is required, you can choose to turn off your service and rely on a combination of solar panels, battery systems, and a standby generator to power your home. This shift mirrors the desire for greater self-consumption and grid independence, driven by rising utility rates and the anticipation of additional fees. Recent advancements in solar, inverter, and battery technology have made off-grid living more accessible and affordable than ever. Off-grid homes typically need a larger solar array and battery storage to manage during winter and bad weather, while standby generators add resilience by providing power and charging batteries when needed. New hybrid inverters can automatically start and control these generators, enhancing their efficiency and lifespan. At StackRack, we offer a full lineup of certified off-grid battery systems to help homeowners enjoy reliable, grid-free living.

 

Summary

In the evolving landscape of NEM-3.0, battery storage has become a pivotal component for homeowners seeking to optimize their energy savings. This policy shift reduces export rates, urging homeowners to efficiently store and utilize their solar energy. Key strategies under NEM-3.0 include focusing on self-consumption and achieving grid independence. With export rates being determined by the Avoided Cost Calculator (ACC), storing energy for evening use offers financial benefits, as evening rates can be significantly higher.

The article explores effective battery strategies, emphasizing the balance between solar array size and battery capacity to maximize return on investment. Smaller batteries can help dodge peak energy costs, while larger systems are ideal for selling energy back at optimal rates and power your home with as little grid energy a. Additionally, the trend towards off-grid living is gaining traction, with advancements in solar and battery technology making it more feasible. Homes can now rely on a mix of solar panels, battery systems, and standby generators to reduce utility dependence.

StackRack supports this transition by providing a full range of certified off-grid battery systems, empowering homeowners to enjoy reliable, grid-free living while safeguarding against rising utility rates and policy shifts.