California’s NEM 3.0 and the Future of Batteries with Michelle Spina, Sales Education Manager at Sol
Welcome to another episode of The Solar Podcast. Today Dave is talking with Michelle Spina sales education manager at SolarEdge. Join us for a timely discussion about changes to California's net metering program, NEM 3.0, the Future of Battery Solutions, and how SolarEdge's Rate Saver program is making battery installations more cost effective. It all starts now on The Solar Podcast.
Dave Anderson (00:34):
Well, welcome back to The Solar Podcast. This is Dave Anderson. I'm your host. I'm thrilled to be here with Michelle Sina today. She's a 13 year veteran in renewable, specifically in solar. We're definitely going to dive into that. Her most recent role is at SolarEdge where she spent the last six years as a trainer. Obviously is an advocate for the product as well, but I think her experience as a trainer is going to be fantastic for us to dive into, particularly because of many of the things that are going on in the solar industry, NEM 3.0, batteries, these sorts of things becoming increasingly important. Michelle, I'm sure I missed a lot of things in terms of your biography, so I'd love if you wouldn't mind filling our listeners in a little bit more about who you are, Michelle.
Michelle Spina (01:09):
Sure, yeah, so I'm the sales education manager here on the North America side for SolarEdge. In the solar industry in the last 13 years I've been on the sales and training side in large residential companies. So that is my background. I'm based in California, but I go all around the country doing trainings with all states. And Dave, you brought up NEM 3.0 is a hot topic for sure right now, being that we are, we're right on the neck of NEM 3.0.
Dave Anderson (01:37):
Yeah, we're actually literally at the precipice and the changing point from NEM 2.0 To NEM 3.0 as we're recording this. And so we're going to try to get it out as quick as possible because obviously our listeners are going to really want to hear what you have to say because of obviously your experience that you have with SolarEdge and SolarEdge is critical role that it's going to be playing in NEM 3.0, particularly for California Residential Solar. Yeah. So maybe we should just dive right into that. So what do you think the main talking points, our listeners are solar people generally speaking, but if you were to try to categorize or explain NEM 3.0 to a lay person, how would you describe it?
Michelle Spina (02:11):
Yeah, well, so I think there's a couple of things as a part of NEM 3.0 that we need to look out for, but export rates is the thing that is the big talking point. So essentially the utility company has decided that they are going to give homeowners about 75% less in value for the energy that they send back to the grid than what they're actually paying. So if we're talking about homeowners paying 50 cents a kilowatt hour in California, it's a very expensive energy. They're only getting back 5 cents if they are exporting to the grid. So in a NEM 3.0 Environment, what we really need to focus on is not exporting or just exporting at really advantageous times. So that's kind of the shift that we're going to see.
Dave Anderson (02:56):
Yeah, there's a term that's been thrown around by some of the technical folks that I've worked with is this concept of net export rate. So what you're really trying to do is minimize the amount of power that you sell back to the grid. And so the calculation of how much money you're going to save has changed quite a bit as a result of NEM 3.0. So maybe if you wouldn't mind not taking anything for granted, we call it NEM 3.0. It's actually not NEM 3.0, but it's because it's the predecessor to the NEM 2.0 program. So for our listeners, if you wouldn't mind just giving an explanation of how NEM 2.0 worked and then obviously the key difference is this export rate, but maybe diving a little bit more into NEM 2.0 will help to provide additional clarity.
Michelle Spina (03:38):
So NEM 2.0, it's a, it's about net metering. Net metering. When you go solar, you essentially are going to send energy back to the grid, obtain credits from that utility company, and then use those credits during the nighttime hours to offset. Essentially, you're not producing at night, so you're going to offset that energy with the credits that you've built during the day. In NEM 2.0, you got a one-to-one ratio. So if you were sending it back for 30 cents, you were getting back 30 cents in credit, and it allowed us in California to offset the most expensive times of day for our energy and so advantageous in terms of savings.
But with NEM 3.0, because you're not getting that same one for one ratio, you're getting less for that energy. You want to instead store that energy so that you can discharge at the really high rates of electricity, use your stored energy instead. And so I like to think about we are all going to have batteries on our house for the most part in a NEM 3.0 environment, but we're going to be using that battery really as a bucket. It's like a bucket to store that energy during the day and then use it at night to offset those peak rates.
Dave Anderson (05:04):
It's an interesting conversation to have here because we've done a lot of analysis. I've talked to a lot of people that have done pretty extensive analysis in terms of the financial return difference and the financial profile that's going to be different from NEM 3.0 versus NEM 2.0. And you're absolutely right. The idea with batteries is that you get a store power that's generated from the solar and when the solar's not generating, but your home is still producing, you now get to draw electricity, the kilowatt hours you produce with your solar from your battery rather than purchasing it from the more expensive grid.
But it also increases the cost of installing a system and it increases the complexity of a system as well. And so you have to now take into account these added costs relative to the benefits. And in a NEM 2.0 scenario, homeowners would, there wasn't necessarily a financial return for doing batteries, maybe a small one because there were price arbitrage opportunities, but not nearly as significant as it is today. So I'm curious, when you're doing your training, how have you been explaining the financial benefits of batteries relative to not having the batteries and have you tried to quantify that?
Michelle Spina (06:11):
Yeah, so we're doing a lot of modeling. We have a tool called Designer, and on the backend we have uploaded and imported all of the rate schedules for PG&E, SCE, SDG&E. Everyone that's involved with NEM 3.0 done several analysis based on different customer profiles. And you're right, I think in the solar industry forever, a lot of us, even in California, we're selling against batteries and now we are in a market where we have to have a battery. But the really interesting mindset shift in NEM 3.0 is that you're going to get a better return on investment with a battery than if you are going solar only in a lot of cases what we're finding, because what you want to do in this environment is you want to be able to take advantage of those export times that are beneficial. So what I didn't mention earlier was that there's two hours in September that you're actually going to get over $3 a kilowatt hour.
So you're paying 40 to 50 cents, you're getting $3 back, so it's a bounty. And when you have a battery solution in NEM 3.0, this allows you to leverage that situation where you can discharge your battery during these times where you could actually make money. And it's really just a different energy management than what we're used to in terms of how we use our batteries in a standard NEM 2.0 environment.
And so what SolarEdge is doing is we actually offer three different scenarios. We have a full home backup scenario, we have a essential loads backup scenario, and then we have what's called a rate saver solution, which is a battery, but as I mentioned earlier, kind of using it as a bucket to store energy but doesn't have backup capabilities. So it's a less expensive option, it's a less expensive installation. And that's really for us, we see it as the new solar only solution with a better return on investment for homeowners. So to answer your question, we're seeing with our modeling seven to eight year payback on cash deals usually and 15 to 30% monthly savings if you're doing like a loan PPA scenario with that rate saver solution.
Dave Anderson (08:35):
Yeah, I'd love, if you wouldn't mind just going into each of those three different options and explaining who the ideal customer customer might be for each of those different configurations.
Michelle Spina (08:46):
Well, Dave, how's your power in terms of stability at your house?
Dave Anderson (08:51):
Well, I'm recording this from Salt Lake, so we have fairly stable power.