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California NEM 3.0: Sunnova offers ‘free’ batteries to counter upcoming policy change

California NEM 3.0: Sunnova offers ‘free’ batteries to counter upcoming policy change
(Sunnova aims to become a micro-utility in California. Credit: Sunnova)

California is one month away from implementing a policy that reduces how much customers with solar panels are paid for surplus power sent to the grid. The process, dubbed NEM 3.0, moves the state from a net metering framework to net billing, which incentivizes co-locating battery storage with solar systems.

In response to the policy change which takes effect April 15, Houston-based Sunnova said it would offer a "free" battery, which it valued at $8,000, to new customers.

The offer targets customers who sign up for a residential lease of both solar and storage services. It does not include the cost of installation, the solar system, or Sunnova's 25-year warranty.

Sunnova CEO John Berger said in a statement that the company views the net metering change as an opportunity to "seize the market and offer real solutions to our customers."

GO DEEPER: Vote Solar executive director Sachu Constantine joined the Factor This! podcast to break down the latest in the fight to save rooftop solar in California. Subscribe wherever you get your podcasts.

Last December, the California Public Utilities Commission approved changes to the state’s net energy metering tariff in a bid to improve price signals by better aligning them with the electric grid’s conditions, both day and night. 

The tariff’s updated billing structure is designed to optimize grid use by the tariff’s customers and incentivize the adoption of combined solar and storage systems. CPUC staff said changes would help meet California’s climate goals and increase reliability, while promoting affordability across all income levels.

In the ruling, the CPUC said that since implementing net energy metering over 20 years ago, California has witnessed the evolution of the customer-sited rooftop solar industry, resulting in the installation of more than 12 GW of clean distributed energy resources. 

The decision said a review of the current net energy metering tariff, known as NEM 2.0, found that the tariff negatively impacts non-participating ratepayers; disproportionately harms low-income ratepayers; and is not cost-effective. 

Micro utility?

Last fall, Sunnova filed paperwork with California state regulators to develop a solar and storage-focused micro-utility. The proposal was seen as posing a relatively small, but novel, challenge to the state’s incumbent investor-owned utilities.

Under the proposal, a wholly owned subsidiary called Sunnova Community Microgrids California would own and operate energy as a service (EaaS) offerings in new communities, including energy generation, storage, and distribution infrastructure. 

The business unit would develop largely self-sustaining micro-utilities by equipping new home communities with solar and storage. The venture was intended to focus on new homes, allowing the company to work with developers to design and implement distributed solar-powered microgrids that would be known as Sunnova Adaptive Communities. Homebuilder Lennar reportedly said it would consider using a microgrid, if regulators approved the plan.

That could be a big if.

The administrative law judge presiding over the case for the CPUC issued a recommendation on Feb. 14 to throw out Sunnova's proposal. The ALJ said that exemptions sought by Sunnova were unauthorized and that the company failed to provide the information required for a Certificate of Public Convenience and Necessity.

The CPUC must now vote on whether to accept the proposed ruling.