May 31, 2024

3 Tips for Using the Amazing NEM Loophole

Not everyone is aware of the NEM Loophole that allows you to achieve strong returns on a solar + storage system under the current NEM 3 agreement, but we’re here to walk you through how it works so you can take advantage of it! Many industry veterans and customers were worried that the value of solar would go down after the update to NEM 2, but we’ve perfected a strategy that allows anyone with a solar + storage system to achieve meaningful savings and impactful returns on their investment, even with the new agreement in place! Here are our 3 tips for using this amazing NEM Loophole to your advantage.

What is NBT?

NBT, or Net Billing Tariff, is the new net metering system known commonly as NEM 3. It replaced the previous net billing agreement, NEM 2. This is where the utility buys power from you depending on the time of day, and then sells it back to you at market rate.

How to use the NEM Loophole

Let’s start by identifying the three tips that will help you take advantage of the NEM Loophole:

  1. Install a Solar + Storage System

  2. Program Your Battery for Grid Discharge

  3. Leverage Energy Arbitrage to Save Big

Now that we have our steps laid out, we can dive into each one and explore how to make the NBT system work for you.

Install a Solar + Storage System

In order to take advantage of the NEM Loophole, you’ll need to first install a storage enabled solar system. Luckily, installing a residential solar system with storage capacity is one of the best ways to increase your property value while also tackling the ever increasing energy rates that have plagued the country in general, and especially California.

Program Your Battery for Grid Discharge

A solar system is the obvious first step, but solar storage is an especially important part of the process, due to the fact that with a battery equipped for grid discharge, you can sell your power back to the grid whenever you’d like. Our baseline advice for those looking to save money on their energy bills would be to have their batteries programmed for maximum self consumption, since day to day NBT rates aren’t worth selling for unless you have excess power. Usually we have our customers use their batteries to save big on power in the evenings, which is perfect for the majority of the year. However, this is where the final step comes in.

Leverage Energy Arbitrage to Save Big

With your battery programmed with our proprietary rate scheduling system, you can make the most of energy arbitrage by selling power back to the grid in the ultra valuable August - September window. During this period of time, the resale price of power goes from pennies on the dollar to multiple times the market rate, allowing you to make hundreds or even thousands of dollars within a short period of time. Utilizing this NEM Loophole, we’ve allowed customers to reduce their break-even window to an average of 4.7 to 6.5 years. This is much closer to the previous agreement's payback period, a clear signal of the value of this simple but effective strategy.

Simplify the NEM Loophole

Given the current state of our aging grid, and the constant utility rate increases that show no sign of slowing down, solar already makes sense for California homeowners. With the use of this NEM Loophole, utility customers can take advantage of NBT to save even more than they currently are. If you’re interested in leveraging our proprietary rate scheduling system to get hundreds to thousands of dollars back from the utility, schedule a free consultation today.

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