Net metering is a system that allows solar panel owners to send excess energy back to the grid in exchange for credits on their utility bills. The system has undergone three major revisions: NEM 1.0, NEM 2.0, and NEM 3.0. In this blog post, we’ll look at the differences between these three versions and what they mean for homeowners who have solar panels installed.
We also have an article about the pros and cons of solar vs electric here
NEM 1.0, also known as “original net metering,” was the system’s first version. Under NEM 1.0, homeowners with solar panels could send excess energy back to the grid and receive credits at the retail rate, which is the same rate they pay the utility company for energy. This effectively allowed homeowners to “sell” their excess energy back to the utility company.
In response to the growing popularity of solar energy, NEM 2.0, also known as “modified net metering,” was introduced. Utility companies could impose limits on the amount of energy that homeowners could send back to the grid under NEM 2.0. This was done to keep the grid from becoming overcrowded and to keep the utility company profitable. However, homeowners could still receive retail-rate credits for the energy they returned to the grid.
NEM 3.0, also known as “successor net metering,” is the system’s most recent version. Utility companies now have more leeway in how they compensate homeowners for the energy they send back to the grid under NEM 3.0. Offering credits at a lower rate than the retail rate or requiring homeowners to pay a fee to send energy back to the grid could be examples of this.
In conclusion, NEM 1.0 is most beneficial to homeowners, while NEM 3.0 is most beneficial to utility companies. NEM 2.0 is a middle ground between the two. Homeowners should be aware of their state’s net metering policies, as they can significantly affect the financial returns of a solar panel installation.