Under NEM 1, you received a 100% credit for energy you exported. Over 12 months, if your solar system exported the same total energy you used from the grid, then your electric bill was zero.

Home batteries offered no benefit in reducing your electric bill, but could provide home backup during grid outages.

Under NEM 2, you received 90% credit for the energy you export. With TOU, the solar you export is credited at a lesser amount than the energy you use in the evening. However, you could still "zero out" your electric bill by adding more solar and increasing your credits to offset your peak energy costs. 

A small home battery (10-15 kWh) could help you save on your electric bill by eliminating expensive energy used during peak hours (5 to 9 pm). However, it probably easier to just add more solar to your roof and increase your credits.

Under NEM 3, you now receive only a 25% credit for the energy you export and there is now a limitation on how much solar you can put on your roof - eliminating the loophole from NEM 2. With TOU rates, solar doesn't make sense without home batteries.

NEM 3 changed solar in California in a big way, and it made it clear that the long-term solution to expensive electric bills, rising utility rates and unexpected grid outages, is powering your home independent from the grid . With solar and a battery system, you can convert your home into a microgrid - generating, storing and using your own energy.

Solar is great for your home because it is a reliable, clean and cost-effective way to generate energy. Did you know that the average cost per kWh for solar is 1.5 cents? Most homes benefit from adding more solar - helping to reduce energy costs in the summer and winter months when we use more energy to keep our homes comfortable. 

Under NEM 3, you receive only 25% credit for the solar energy you export, so larger solar systems only make sense if you have a larger battery bank to store the energy for later use. 

Under NEM 3, you are required to have a time-of-use (TOU) rate plan. This means energy will cost more when demand is higher in the evenings (peak time) and less during the day when demand is lower (off-peak). However, utility rates are increasing faster than inflation and increases affect both peak and off-peak rates.  

The long-term solution to avoiding increasing electric bills from utility hikes is solar and a large enough battery bank (usually 30-40kWh) designed to reduce both your peak and off-peak energy use. 

Just as energy costs more during peak times, the utility company will credit more if you export energy back during these times. A larger battery bank allows you to increase your credits by exporting more during these times. 

Virtual Power Plant (VPP) programs are becoming more common in California as ways help support the grid during high demand times. As a VPP customer, the utility will compensate you in exchange for your battery system exporting energy when needed. The bigger your battery bank, the more you can participate.