Franklin Home Power Solution
NEM 3.0
What is California NEM 3.0?
NEM 3.0, also known as the Net Billing Tariff (NBT), is California's updated solar billing policy that began on April 15, 2023. It governs how credits for solar energy exports are valued and applied to the electricity bills of customers in specific utility territories (PG&E, SCE, SDG&E).
How does NEM 3.0 work?
Under NEM 3.0 (NBT), customers with solar systems earn credits for excess energy they export to the grid. These credits are valued based on the utility's avoided cost, similar to wholesale rates. This is a shift from earlier NEM programs where credits were often at or near retail rates, resulting in a different economic incentive structure for solar energy producers.
When did NEM 3.0 begin?
NEM 3.0 commenced on April 15, 2023, for new solar installations under PG&E, SCE, and SDG&E. Billing under NBT began effective around December 2023 and later.
Will NEM 3.0 be changed?
As of the latest information, there is no indication that NEM 3.0 will be significantly changed. However, regulatory policies are subject to change based on various factors such as legislative actions, regulatory reviews, and stakeholder feedback.
What does NEM 3.0 mean for solar?
NEM 3.0 has implications for the economics of solar energy in California. It adjusts how credits for energy exports are calculated, potentially affecting the financial returns for solar investments. The shift to valuing credits based on avoided costs impacts the cost-benefit analysis of solar installations, particularly in conjunction with battery storage such as FranklinWH.
What is the difference between NEM 2.0 and NEM 3.0?
- NEM 2.0: Credits were typically valued closer to retail rates, which encouraged solar customers to export excess energy to the grid at a similar rate to what they would pay for electricity.
- NEM 3.0 (NBT): Credits are now valued based on the avoided cost of utility, which is generally lower than retail rates. This means customers receive less compensation for exported energy, potentially reducing the economic incentive to export and increasing the value of onsite energy storage solutions such as FranklinWH's to store excess energy for later use.
What is FranklinWH's solution to NEM 3.0?
Solar combined with FranklinWH's advanced Energy Storage System (ESS) offers optimal value under the NEM 3.0. Despite the higher initial investment, integrating the FranklinWH system with your solar setup results in substantial long-term savings compared to relying solely on solar energy.
By leveraging the Investment Tax Credit (ITC) and analyzing the net present value (NPV) under varying utility rates across California—PG&E, SDG&E, and SCE—with a 5% discount rate and 3% annual utility inflation, the FranklinWH energy management system demonstrates compelling financial benefits. NPVs of $17,108, $25,686, and $21,908 are achieved, respectively, indicating positive returns typically within 5 to 7 years, depending on the utility.
Enhance your lifetime savings while securing your home's energy resilience with FranklinWH. For more insights into how the FranklinWH system maximizes savings under the NEM 3.0, refer to our detailed white paper.
How do I know the net metering policy that my system was installed under?
To determine whether your FranklinWH system in California operates under NEM 2.0 or NEM 3.0:
- Check the FranklinWH App: FranklinWH App provides the DER schedule, such as Net Metering, Net Billing, Self-consumption, and Peak Demand, for customer selection in the installation commissioning according to the interconnection agreement from the utility. FranklinWH homeowners can check their NEM policy in the FranklinWH App DER mode, which includes NEM 2.0 and NEM 3.0.
- Contact your installer: You can also contact your certified installer or provider. They should have records of which policy your system falls under.
- Utility communications: Review any emails or letters from your utility regarding your solar installation. They often specify the net metering policy.
- Online portal: Log in to your utility account online. Look for sections related to solar or interconnection agreements to find details about the net metering policy.
Following these steps will help you identify whether your system operates under NEM 2.0 or NEM 3.0. If you need more assistance, contact your installer or utility directly.
How will FranklinWH operate if I have a Net Billing Tariff?
The FranklinWH system adapts NBT by storing energy generated by PV during the daytime and reserving it for peak TOU hours. Daytime load usage is directly offset by PV generation. Stored energy is conserved until high-credit hours, especially in August and September, when the credit is the highest throughout the year, strategically shaving and shifting home load away from these peak times. This approach maximizes credit benefits, ensuring efficient use of battery energy for optimal home energy management.
VPP
Virtual Power Plants (VPPs) are cloud-based systems that integrate multiple power sources to provide a more reliable overall power supply to a home, a neighborhood, or a larger community. FranklinWH system is available for various VPP programs across the country. FranklinWH homeowners can gain incentives by participating in local VPP programs.
Current VPP programs available for FranklinWH customers:
- California: Power Price Protection
- Connecticut: Energy Storage Solutions
- Massachusetts/New Hampshire/Rhode Island: ConnectedSolutions
- North Carolina: PowerPair/Duke Energy Battery Program
- Vermont: Bring Your Own Device
- Portland: Smart Battery Pilot
