If you’re a California homeowner thinking about going solar, your window to maximize savings is short. Our Energy Advisors strongly recommend you select an installer no later than March 31st and submit your interconnection application (via your installer) by April 14, 2023. After this date, your solar savings will still be meaningful but 60% lower over the next 20 years. This change is due to NEM 3, California’s new net metering policy, approved in December 2022, which will apply to systems with interconnection applications submitted after April 14th at 5pm PST. NOTE: your installation does not have to happen by this deadline, and you can even make some changes to your system design after submitting your application.
Net metering is when your utility company compensates you for the excess electricity your solar energy system generates and sends to the grid – but, importantly, your utility doesn’t necessarily pay you the same price for the electricity you send them as they charge for the electricity you consume from the grid. The change from NEM 2 to NEM 3 in April will drop the rate they pay you by about 75%! The good news: anyone who submits an interconnection application by the required date will be grandfathered into NEM 2 rates for 20 years. Luckily, we’re here to outline the steps you need to take to ensure you lock in NEM 2 rates.
5 steps to lock in NEM 2
- ASAP: decide if you should go solar and get quotes
- March: choose an installer and sign your contract
- End of March: schedule your site visit
- April 14, 2023: submit your interconnection application
- Three years after your interconnection application is submitted (by April 14, 2026 at the latest): install your solar energy system
1. Decide if you should go solar and get quotes
Approximate due date: ASAP!
The first step to locking in solar savings from NEM 2 is to see if your home is a good fit for solar. Most important are the specifics of your roof, such as its shading, age, size, material, angle, and orientation. In California, electricity rates are some of the highest in the country, so as long as your house and roof are suitable, solar will definitely be worth it.
Next, gather installer quotes so you can compare them for factors like cost, equipment, and reputation – fortunately, the free EnergySage Marketplace makes this easy by collecting quotes for you from our network of pre-vetted installers. To lock in NEM 2, we recommend having your quotes in hand as soon as possible (our installers usually return quotes within a day of your request).
What if you want to make changes to your existing solar system?
The other major consideration is whether you want to add capacity to your existing solar system – for example, if you’re adding new electrical upgrades (like an EV, heated pool, or heat pumps) and have the space, it might be worth it to increase your system size. Unfortunately, after April 14th, you won’t be able to do so without switching your entire solar panel system to NEM 3, so you’ll need to submit your new interconnection application before that date.
2. Choose an installer and sign your contract
Approximate due date: March 2023
Now that you have quotes choose the best installer for you. EnergySage’s mission is to help you choose with confidence: our team of expert Energy Advisors can walk you through your quotes and answer all your questions – for free! Once you’ve selected an installer, you’ll need to sign a contract, and it’s important that the name on the signed contract matches the name on your utility bill. We recommend signing your contract in March (ideally mid-March) to ensure your installer has enough time to prepare and submit all required documentation before the April 14th cutoff date.
3. Schedule a site visit
Approximate due date: End of March 2023
After signing your contract, you’ll need to schedule a site visit with your installer – these can be conducted either in person or virtually (depending on your installer). During this step, an engineer (not a salesperson) will ensure your home is ready for your new solar energy system. They’ll check your roof and electrical panel and decide if any updates are needed before you go solar.
Based on the site visit, your installer will create a single-line diagram, or SLD, a basic electrical drawing of the system, and the scope of work packet – the SLD will be included in your interconnection application and can’t change after April 14th. The date of your site visit is a bit more flexible (especially if it’s virtual), but we recommend completing it by April in case any last-minute changes are needed.
What happens if you need to upgrade your roof or electrical panel?
Let’s say an engineer just completed your site visit and says you need to redo your roof: now what? While we haven’t seen any clear information on this situation, ultimately, it will likely depend on whether the roof changes will impact the SLD. If they will, you may also need to obtain your new roof designs at this stage so they can be included in the SLD. On the electrical panel side, you don’t need to worry: you can upgrade your electrical panel after April 14th while still retaining NEM 2 rates.
4. Submit your interconnection application
Due date: April 14, 2023!
While your installer will be the one to actually submit your interconnection application, you’ll need to be involved in the process. First, you’ll have to review and sign the California Solar Consumer Protection Guide as part of the application. If you’re planning on oversizing your system, you’ll also need to sign an oversizing attestation stating that you plan to make the electrical upgrades within the next year. Double-check that your property address and name are the same on every document. Your installer needs to submit this full application by April 14th at 5pm PST.
What can’t change after April 14, 2023?
A lot will happen after your interconnection application is submitted, including the installation itself. However, there are a few things you can’t adjust after April 14th if you want to remain grandfathered into NEM 2, including:
- Increase your system size: while you can swap equipment if necessary, it can’t increase the size of your system.
- Decrease your system by more than 20%: let’s say you decide not to purchase an EV this year – you can still decrease your system size as long as it’s not by more than 20%.
- Change generators: while you can add a solar battery after April 14th, you’ll need to ensure your generator capacity stays the same.
- Change installers: your installer may choose to use a subcontractor for your installation (especially if they’re inundated with installations during this hectic time!), which is not a problem; however, if your installer goes out of business and their name is no longer on the project, you won’t be able to remain grandfathered into NEM 2.
5. Install your solar energy system
Due date: April 14, 2026 (that’s right – three years)
Your installer has successfully submitted your interconnection application on time – now what’s the next step? There are a number of tasks your installer will be completing at this point, including acquiring a building permit, obtaining equipment, completing the installation itself, and receiving permission to operate. You’ll need to decide how you want to finance your system – either with cash or with one of the many great solar loan products available. In order for you to remain locked into NEM 2 rates, all of these steps must be completed within three years of the date your interconnection application is submitted (by April 14th, 2026 at the latest). But sooner is certainly better: once your system is installed and interconnected, you’re ready to start saving with your new solar energy system while being compensated for what you export to the grid at great rates!
What can change after April 14, 2023?
There are a few changes that you can make after you’ve submitted your interconnection application without compromising your NEM 2 status, including:
- Upgrading your electrical panel
- Adding a solar battery
- Changing your financing plan
- Decreasing your system size by less than 20%
- Changing equipment (if it doesn’t increase your system size)
- Updating your meter
Go solar now with EnergySage
Installing a solar energy system can feel overwhelming, but EnergySage is here to make it simple. Get free quotes through the EnergySage Marketplace, and compare quotes from only prescreened, reputable solar installers. If you have any questions along the way, we’ll provide you with tools and resources and access to a free Energy Advisor to walk you through the process.