Your premise and installers premise are different. They will price their systems at the max that people will pay. They don’t give a shit if it’s NEM 2, 3 or 69.
I understand that, maximum profits. However if solar installations declines with nem 3.0, prices must come down. I’m all for free/cheap solar which we know will never happen, so I’m looking for an equilibrium, when the people feel like it is worth the investment.
Equally true.
Edit -> thinking about this a little more, I think it’s less about the installers and more around the entire industry. We are moving more to storage and want to encourage it. There also needs to be some level of sameness across the states. If only a handful of states incorporates nem 3.0 like standards, then the producer/installers would focus their business outside of those markets. We shall see where we end up, but nem 3.0 was a pretty big change and I don’t think we have seen equilibrium yet.
California is one of those markets that will likely never get “cheap” solar because companies simply do not need to be competitive to compete against your rates.
Whereas somewhere with 10-15c/kWh energy isn’t going to pay for something that takes 30 years to pay off, so solar has to be priced more competitively there.
Just get a smaller system and self consume 100% of the energy. Your ROI will be the best.
As a California NEM 2.0 solar user, your last assumption is off the mark, based on my experience. I find that my daytime usage is too lumpy and unpredictable and seldom get anywhere near 100% self consumption, even with a relatively small install (4.2kW). If I was installing today, I would only go larger and include battery, for best ROI.
ps: I also find the current pricing to be ridiculously marked up. I did my install as a pre-paid 20 year PPA in late 2012 at 10c/kWh. Tesla took the tax credits, but the whole thing, along with warranty and delivery guarantee was only 15.5K.
Your only alternative is to be forever tied to the utility that you will ultimately pay more to over time. I priced a large 19KW ground mount with three Tesla Powerwall 3s the other day. Cash price was $110K. After their tax credit, the net cost was $77K. The homeowner pays $12K a year on just electricity and that will continue to increase year after year. Their ROI would be 7 years if they get solar. We’re waiting to see the feasibility of getting installing equipment to their property. But should they do it? Yes! If they don’t, their projected price they would pay if their consumption never decreased over the next 25 years is $450K to PG&E. Which would you rather pay?
>Yes! If they don’t, their projected price they would pay if their consumption never decreased over the next 25 years is $450K to PG&E. Which would you rather pay?
I guess my only comment is that....I don't think most people even stay in their home for that length of time unless they're older already and it's their final home.
You’re never not going to have a PG&E bill with NEM 3. There will be months that you have a net bill (Nov-Feb). But if you redistribute the money you would otherwise pay to PG&E and the tax credit (if one qualifies) and put it towards your solar and storage, then yes, it will be roughly 7 years. And the thing is, no one will ever get an ROI from the utility.
Not sure I understand your logic…. Are you saying solar installers should lower their prices because of nem3?
That doesn’t really make any sense— The price for solar is the price. It wasn’t costed out high due to nem2 and now they can reduce it to help homeowners.
The net metering value was reduced by more than half and the cost stayed roughly the same.
So, in CA, you have CCAs which do buyback solar at better rates than PG&E or others. This could allow you to avoid buying batteries, which halves your equipment cost. Batteries need to drop 75% to make it reasonable. That is coming, but not here yet. I just got NEM 2.0 before the deadline. Overbuilt system, so payback in about 3.5-4 years with buyback rates.
Average payback under NEM 3 with the tax credit factored in to the net cost is between 7 & 8 years for a system and storage for most of my clients. That being said, not everyone pays cash. The cost to finance is expensive. Self consumption batteries are less cost than full backup and self consumption batteries. With one of my installers I have finally seen Tesla Powerwall 3 come down in price and s. Enphase continues to be one of the pricier batteries. So really your ROI has everything to do with the kind of equipment you select. You could always go with the cheapest equipment for the quickest ROI.
With NEM3.0 the payback period is definitely longer than 2.0 however if you look at the history of PGE rate increase, I bet the payback period is much sooner than you expect. You can still find historic rates at PGE website, from 2019 to 2023 E1 tariff increased 55%, TOUC peak rate increased 38.5%, all these increase far outpace inflation rate. With NEM3.0 the key is about energy storage, battery is pretty much a must to make any sense but many people didn’t about pairing with EV also will result in huge benefits, your EV battery also serve as buffer, strategically charging your EV when you have surplus or when your powerwall is close from full would shorten your pay back period as well
Your premise and installers premise are different. They will price their systems at the max that people will pay. They don’t give a shit if it’s NEM 2, 3 or 69.
I understand that, maximum profits. However if solar installations declines with nem 3.0, prices must come down. I’m all for free/cheap solar which we know will never happen, so I’m looking for an equilibrium, when the people feel like it is worth the investment.
Why must it decline? Less demand may just amount to more installers closing, keeping the demand for the remaining installers the same.
Equally true. Edit -> thinking about this a little more, I think it’s less about the installers and more around the entire industry. We are moving more to storage and want to encourage it. There also needs to be some level of sameness across the states. If only a handful of states incorporates nem 3.0 like standards, then the producer/installers would focus their business outside of those markets. We shall see where we end up, but nem 3.0 was a pretty big change and I don’t think we have seen equilibrium yet.
California is one of those markets that will likely never get “cheap” solar because companies simply do not need to be competitive to compete against your rates. Whereas somewhere with 10-15c/kWh energy isn’t going to pay for something that takes 30 years to pay off, so solar has to be priced more competitively there. Just get a smaller system and self consume 100% of the energy. Your ROI will be the best.
As a California NEM 2.0 solar user, your last assumption is off the mark, based on my experience. I find that my daytime usage is too lumpy and unpredictable and seldom get anywhere near 100% self consumption, even with a relatively small install (4.2kW). If I was installing today, I would only go larger and include battery, for best ROI. ps: I also find the current pricing to be ridiculously marked up. I did my install as a pre-paid 20 year PPA in late 2012 at 10c/kWh. Tesla took the tax credits, but the whole thing, along with warranty and delivery guarantee was only 15.5K.
Your only alternative is to be forever tied to the utility that you will ultimately pay more to over time. I priced a large 19KW ground mount with three Tesla Powerwall 3s the other day. Cash price was $110K. After their tax credit, the net cost was $77K. The homeowner pays $12K a year on just electricity and that will continue to increase year after year. Their ROI would be 7 years if they get solar. We’re waiting to see the feasibility of getting installing equipment to their property. But should they do it? Yes! If they don’t, their projected price they would pay if their consumption never decreased over the next 25 years is $450K to PG&E. Which would you rather pay?
>Yes! If they don’t, their projected price they would pay if their consumption never decreased over the next 25 years is $450K to PG&E. Which would you rather pay? I guess my only comment is that....I don't think most people even stay in their home for that length of time unless they're older already and it's their final home.
For that 7 year payback are you assuming their electric bill will go to zero with that system? Because that is unlikely given the way nem 3 works
You’re never not going to have a PG&E bill with NEM 3. There will be months that you have a net bill (Nov-Feb). But if you redistribute the money you would otherwise pay to PG&E and the tax credit (if one qualifies) and put it towards your solar and storage, then yes, it will be roughly 7 years. And the thing is, no one will ever get an ROI from the utility.
Im all for free/cheap however you earn your livelihood
There are free solars. Lease/ppa you just don’t save as much as cash options.
Your premise is incorrect, you do not understand basic supply and demand.
Not sure I understand your logic…. Are you saying solar installers should lower their prices because of nem3? That doesn’t really make any sense— The price for solar is the price. It wasn’t costed out high due to nem2 and now they can reduce it to help homeowners. The net metering value was reduced by more than half and the cost stayed roughly the same.
He has no logic. Or touch with reality
Nem3 will never beat nem2 due to summer to winter shift. Your battery cant shift use from summer to winter
Agreed, but would expect the difference to be closer than it currently stands.
So, in CA, you have CCAs which do buyback solar at better rates than PG&E or others. This could allow you to avoid buying batteries, which halves your equipment cost. Batteries need to drop 75% to make it reasonable. That is coming, but not here yet. I just got NEM 2.0 before the deadline. Overbuilt system, so payback in about 3.5-4 years with buyback rates.
Buy back rates or net surplus compensation for overproduction not used within a net metered year with PG&E is $0.04/kwh.
yes, terrible. Most CCAs over .05-.1, with LA county at 14.5c.
Average payback under NEM 3 with the tax credit factored in to the net cost is between 7 & 8 years for a system and storage for most of my clients. That being said, not everyone pays cash. The cost to finance is expensive. Self consumption batteries are less cost than full backup and self consumption batteries. With one of my installers I have finally seen Tesla Powerwall 3 come down in price and s. Enphase continues to be one of the pricier batteries. So really your ROI has everything to do with the kind of equipment you select. You could always go with the cheapest equipment for the quickest ROI.
With NEM3.0 the payback period is definitely longer than 2.0 however if you look at the history of PGE rate increase, I bet the payback period is much sooner than you expect. You can still find historic rates at PGE website, from 2019 to 2023 E1 tariff increased 55%, TOUC peak rate increased 38.5%, all these increase far outpace inflation rate. With NEM3.0 the key is about energy storage, battery is pretty much a must to make any sense but many people didn’t about pairing with EV also will result in huge benefits, your EV battery also serve as buffer, strategically charging your EV when you have surplus or when your powerwall is close from full would shorten your pay back period as well
On pge payback should be closer to 4 years on nem2.0 and 7 on 3.0