California's Net Billing Tariff Explained (NEM 3.0)

California homeowners may use “net metering” as a catch-all term for solar export rules. California’s newer framework is the Net Billing Tariff. The California Public Utilities Commission established it for customers submitting a net-energy-metering interconnection application on or after 15 April 2023. Customers who submitted an application by 14 April 2023 are not affected by that decision. The application date is therefore an important first check for a homeowner trying to identify which program applies. The Net Billing Tariff is California-specific. It does not establish rules for customers outside the state.

What the Net Billing Tariff Replaced

The Net Billing Tariff, often called NEM 3.0, was established under California Public Utilities Commission Decision D.22-12-056. It succeeded the earlier Net Energy Metering 2.0 program for applications submitted on or after the cutoff. NEM 3.0 is a commonly used nickname rather than the CPUC’s official name. CPUC states that the tariff is intended to promote grid reliability, incentivize solar and battery storage, and control electricity costs for utility customers. Those are the commission’s stated policy goals. They are not a promise of a specific financial result for any household. Homeowners should use CPUC and their own utility’s current materials when assessing an individual solar proposal.

Who the April 2023 Cutoff Affects

The cutoff date matters most for homeowners trying to work out which rules apply to them. Customers who submitted a Net Energy Metering application by 14 April 2023 are not affected by the Net Billing Tariff. They keep their prior terms. Customers submitting an application on or after 15 April 2023 fall under the newer tariff. Two nearby households can therefore be under different compensation structures even when their systems look similar. A homeowner unsure which program applies should check the date on their original application and ask their utility to confirm the applicable tariff.

What the CPUC Decision Says

Decision D.22-12-056 established the Net Billing Tariff as the successor to NEM 2.0. CPUC says the new tariff is expected to promote grid reliability, incentivize solar and battery storage, and control electricity costs for utility customers. The commission does not state one universal export price, battery price, or payback period for every household on its overview page. A solar proposal must therefore be assessed using the tariff and account information that applies to the individual utility customer.

Where Homeowners Can Check Their Terms

A homeowner considering home solar or battery storage should start with the CPUC’s Net Billing Tariff materials and their own utility’s current tariff. The decision’s April 2023 cutoff is the key starting point. The information applicable to one customer may not apply to another customer who filed at a different time or is served by a different utility. Utility-specific documents are more useful than a generic estimate when comparing a proposal.

In short, the Net Billing Tariff is California’s framework for new qualifying solar applications submitted on or after 15 April 2023. It was established under CPUC Decision D.22-12-056. Customers who submitted a Net Energy Metering application by 14 April 2023 are not affected by that decision. CPUC states its goals as grid reliability, solar-and-battery-storage incentives, and electricity-cost control.