Net Energy Metering 3.0 Proposed Decision Will Impact New Solar Projects in San Diego

solar projects in San Diego

LATEST INFORMATION: On 12.15.22 the California Pubic Utilities Commission voted in NEM 3.0. It will negatively impact the ROI of solar. If you are considering a solar system for your business please contact us soon. The more-favorable NEM 2.0 rates may still be available for your project. [Post update: 12.16.22]


The just-announced proposed decision for NEM 3.0 will have a powerful and negative impact on future, private solar projects in San Diego. This blog is an overview of the current solar tariffs and requirements and the changes that will hurt privately-owned solar systems in California. If you are a commercial building owner or homeowner in California please contact us to hear the latest news and installation timeline estimations.

Submit the form above or call us at 619-692-2015 to learn more. There’s no obligation, we just want you to know the disappearing options for your solar project. 

A solar project completed before NEM 3.0 takes effect will deliver more cost savings for 20 years than one completed after NEM 3.0 has become the law of the land in California. As of this post in November of 2022, the cutoff for applications could be as early as April 14, 2023 for systems to connect under the better NEM 2.0 rules. 

Solar systems save money in two ways. They produce power that businesses and homes can use during the day, and they also sell their excess energy back to the utility to be re-sold to non-solar customers. The “price” of electricity is a variable, and the California Public Utilities Commission (CPUC) creates the tariffs, laws, and rules that affect this price. These buy/sell rates and fees are called Net Energy Metering. 

When solar was small, this buy/sell rate was not a significant factor. As solar gained popularity, the utilities pushed to lower the price they would have to pay for solar electricity from businesses and homes with solar. In 1996 Net Energy Metering was introduced. Then in 2016 it was updated and Net Energy Metering 2.0 (NEM 2.0) became the law of the land. NEM 2.0 hurt the value of solar to the solar project owner, but solar remains a great return on investment financially (and brings the added benefit of more renewable energy use). 

The next wave of devaluing solar energy’s price has just started. The CPUC announced their Proposed Decision right after the 2022 midterm elections. This Proposed Decision makes the rates much less advantageous to solar projects in San Diego. As of the date of this article, the vote to finalize NEM 3.0 is set for December 15, 2022.

If the vote takes place on this day, and the current Proposed Decision is passed, the changes would reduce the value of solar systems in California by 75%. This would apply to all commercial and residential systems that are submitted for NEM after April 14, 2023.  

The small businesses of the solar industry and solar advocates will push to improve the new rates and fees, but there is only so much that can be done to stop the large powers that are pushing to throttle back privately owned solar systems. 

The great news is that there are other excellent incentives still in play for solar, including the Investment Tax Credit (ITC). The ITC was restored to its full 30% for 2022 and beyond (up to ten years total from its return to 30%). For businesses, there are more incentives that we would love to discuss that greatly reduce the payback period of a commercial solar system in California

Here’s what this means to you in 2022 and early 2023: If you are considering a solar project installation any time in the future, now is the time to get started. 

At HES Solar we’ve been installing top-quality solar systems for over 21 years. We can create the perfect system for you… but we and all solar installers will soon be forced to design systems under NEM 3.0’s less-advantageous solar rates and solar fees. 

News will turn into worry and then turn into a rush to get solar. Contact us today to see if there is still time to design and install your solar project in time to lock in NEM 2.0’s better rates. Let us show you the value of a California solar system today vs. the value of that same solar system after NEM 3.0 has been finalized and implemented. 

Commercial solar projects can only move so quickly. Contact us today before we’re booked up and unable to get your system completed in time. We are experts in commercial solar installation with and without commercial energy storage systems such as the Tesla Megapack. We are innovators of micro-grid system designs. Get in touch with us today to gather the facts and determine if your solar system project can still be completed in time to qualify for the better solar rates and fees. It’s as simple as submitting your information through the form at the beginning of this story or giving us a call at 619-692-2015. Thank you.


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We are a San Diego-based solar energy production and energy storage installation company. We have been an energy innovator since 2001 and can handle projects from solar-only arrays to micro-grid solar and storage systems with on-site EV charging stations. 

If you’re looking into the benefits of on-site energy production, energy storage, or EV Charging capability, we’d love to speak with you. We’ll show you how to lower and stabilize energy costs, receive the maximum incentives, open new revenue streams, and gain control over one of the largest expenses of your business or commercial property. 

Click here to be contacted by an HES Renewables representative, or simply dial us at 866-HES-RNEW (866-437-7639).

Robert Laverty

Senior Energy Consultant, Residential

Robert Laverty joined the HES team in the summer of 2018, bringing his ten years of solar design experience and his Bachelor’s degree from the University of Puget Sound with him. Robert is dedicated to finding solutions to help families produce and store electricity in order to reduce their reliance on grid power as well as help reduce their household’s carbon footprint. Robert’s experience as a newspaper editor as well as his involvement with the sustainability-focused Rocky Mountain Institute drives him to constantly seek out innovative ways to meet energy needs through renewable resources as well as helps him share those ideas with Southern California homeowners. When not at work or volunteering time with his church or community, Robert spends time with his wife and two sons or pursues his passion of fly fishing.

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