If you’re a homeowner with a solar system under a Net Energy Metering (NEM) agreement—whether it’s NEM 1.0 or NEM 2.0—you likely want to hold onto your current NEM benefits. These earlier NEM versions offer better rates for excess energy you send to the grid, making it financially advantageous to keep your original NEM status. However, if your energy needs have grown and you’re considering adding more solar panels to your system, you may be worried about losing your NEM benefits. Fortunately, there’s a solution that allows you to expand your solar system without losing your NEM status: non-export systems. 

What Is a Non-Export System and How Does It Work?

A non-export system is an add-on to your existing solar setup that generates power for your home but does not send any excess electricity to the grid. This is important because, according to the California Solar and Storage Association (CALSSA), homeowners can install non-export systems alongside their original NEM systems without losing their NEM benefits. 

In a typical solar setup, any extra energy your system generates is exported to the grid, and you’re credited for it. Under NEM 1.0 or NEM 2.0, these credits are highly valuable because they’re based on older, more favorable rates. However, adding new capacity that exports to the grid could trigger a switch to NEM 3.0, which offers less attractive credit rates. 

By adding a non-export system, you can increase your solar capacity without sending additional energy to the grid, which helps you maintain your original NEM status. This allows you to keep receiving the higher credits for any surplus energy your existing system generates, while still benefiting from the added solar power to meet your increased energy needs.  

Why Non-Export Systems Preserve NEM Status?

According to CALSSA, one of the key reasons for using a non-export system is to avoid losing your NEM 1.0 or NEM 2.0 status. When you add new solar capacity as non-export, the system is designed to only generate power for your home’s use, ensuring no excess energy is sent to the grid. This way, your original solar system continues to operate under the favorable NEM rules, while the new panels operate independently for self-consumption. 

The reason this works is that the non-export setup ensures that the utility company sees no additional exported energy beyond what your original system is producing. This is enforced through a technology called a Power Control System (PCS), which monitors the flow of energy and prevents any new solar generation from being exported to the grid. As long as the new system is designed correctly, the utility company will allow you to keep your existing NEM status.  

Key Benefits of Adding a Non-Export Solar System 

1. No Change to NEM Status: Your original NEM 1.0 or NEM 2.0 agreement remains intact, meaning you continue to receive higher credits for any excess energy your legacy system exports.
   
   
2. Increased Solar Capacity: You can install additional panels to meet your growing energy needs, whether you’re adding new appliances, an electric vehicle (EV), or just want to increase your home’s energy efficiency.
   
   
3. Avoiding Higher Utility Bills: By increasing your solar capacity with a non-export system, you reduce your reliance on the grid for electricity, lowering your utility bills while still keeping the financial benefits of your original NEM agreement.
   
   
4. Battery Compatibility: If you want to maximize the value of your new system, you can pair your non-export panels with a battery storage system. This allows you to store excess energy and use it later, further reducing your dependency on the grid without affecting your NEM status. 

How Non-Export Systems Work?  

The non-export configuration ensures that your new solar system doesn’t send energy back to the grid. Here’s how it works:  

• A Power Control System (PCS) is installed to regulate the flow of electricity. If your new solar system produces more energy than your home can use at a given moment, the PCS steps in and prevents that excess energy from being exported. This system can respond within two seconds to shut down any power flow toward the grid. 

• The PCS operates automatically and ensures that your new system remains compliant with non-export rules. Because the utility company won’t see any extra energy being exported, your NEM status remains unchanged. 

No Expensive Upgrades or Complications 

One of the advantages of using a non-export system is that you don’t need to undergo any expensive or complicated upgrades to your existing solar setup. In some cases, homeowners might consider adding a second meter or making significant system changes, but these are unnecessary with a non-export setup. Instead, your existing system continues to operate as usual, and the new panels are simply configured to ensure they don’t export energy to the grid. 

Frequently Asked Questions  

What is NEM?
NEM stands for Net Energy Metering, which allows homeowners with solar systems to earn credits for excess energy sent to the grid. California has had three versions: NEM 1.0, 2.0, and now 3.0. Each version sets different rules and rates for how those credits are applied. 

Can I add panels to my existing system without losing my NEM status?
Yes! You can make small additions (up to 1 kW or 10% of your original system) without changing your NEM status. For larger expansions, you can install non-exporting panels to maintain your current NEM status.  

What are non-exporting panels?
Non-exporting panels generate energy for your home but do not send excess power to the grid. This allows you to expand your solar system without losing your grandfathered NEM status. 

Do I need to install a battery if I add non-exporting panels?
While a battery is not required, it’s a good idea. A battery allows you to store any excess energy generated by your new panels, so you can use it when the sun isn’t shining, maximizing the benefits of your expansion. 

Will I still get tax credits for expanding my solar system?
Yes, adding more panels to your system qualifies for federal solar tax credits, but only the cost of the new panels and associated equipment can be claimed. 

Conclusion: Should You Expand? 

If you’re a homeowner with an NEM 1.0 or NEM 2.0 solar system, adding more solar capacity is possible without sacrificing your valuable NEM status. By installing a non-export system, you can generate more solar power for your home’s needs without exporting excess energy to the grid, ensuring that your original NEM agreement remains intact. 

Whether you’re expanding your system to accommodate new energy needs, such as an electric vehicle, or simply want to lower your energy bills, this approach allows you to enjoy the benefits of increased solar production while preserving the financial perks of your current NEM status.