NEM 3.0 Incentives in 2025: Everything You Need to Know

Introduction to NEM 3.0

NEM 3.0 (Net Energy Metering 3.0) is California’s solar policy governing compensation for excess solar energy exported to the grid. Introduced on April 15, 2023, NEM 3.0 replaced the previous NEM 2.0 program and brought significant changes aimed at encouraging solar-plus-storage adoption and self-consumption of solar power.

Key Changes Under NEM 3.0:

Lower Export Rates: Compensation for exported solar power dropped by 75%, averaging $0.05–$0.08 per kWh, compared to NEM 2.0.

Emphasis on Battery Storage: Incentivizes homeowners to store and use solar energy during peak hours.

20-Year Grandfathering Period: Homeowners who enrolled before April 15, 2023, retained NEM 2.0 rates for 20 years.

Time-of-Use (TOU) Rates: Export rates vary based on demand, with higher payouts during peak periods.

Federal and State Incentives for 2025:

Federal Investment Tax Credit (ITC): 30% tax credit on solar installations, available until 2032.

Self-Generation Incentive Program (SGIP): Rebates for battery storage systems, with higher rebates for low-income households.

Local Rebates: Additional incentives for solar-plus-storage systems available in Coachella Valley.

Impact of NEM 3.0 on Solar ROI

ROI periods have extended to 9–12 years without storage but can remain 5–7 years with solar-plus-battery setups due to peak-hour savings.

Solar owners benefit more from storing excess power than exporting to the grid.

Best Strategies Under NEM 3.0:

Add Battery Storage: Reduces reliance on grid power and capitalizes on TOU rates.

Use Smart Energy Management Systems: Automate usage to optimize savings during peak pricing.

Join Virtual Power Plants (VPP): Sell stored energy to the grid during peak times for additional income.

What’s New in 2025?

AB 2619 Proposal: A 2024 legislative bill under review, aiming to introduce higher TOU rates during energy crises and additional storage rebates.

SGIP Expansion: Increased funding for home battery installations through 2026.

Local Programs: JJ Energy Inc. offers customized solar and storage solutions tailored for homeowners in Coachella Valley, maximizing NEM 3.0 benefits.

Is Solar Still Worth It Under NEM 3.0?

Yes! When paired with battery storage, solar installations remain a smart investment, especially with federal tax credits and local rebates. Additionally, rising utility rates continue to make solar a cost-saving solution.

Final Thoughts & Call to Action:

NEM 3.0 requires homeowners to rethink their solar strategies, but with storage integration, federal incentives, and local rebates, it’s still an excellent investment. For Coachella Valley homeowners, combining solar, batteries, and EV chargers is a powerful way to maximize energy savings and sustainability.

Ready to maximize your solar savings under NEM 3.0? Contact JJ Energy Inc. for a free consultation and discover how our tailored solutions can help you achieve energy independence.