Why Many California PPA and Lease Pitches Break Under NEM 3.0

Under NEM 3.0, paying for everything the system generates is not the same as paying for the electricity that actually helps your bill.

One of the biggest traps in many California PPA and lease pitches is that the math is built around generated electricity instead of around the electricity that actually helps the homeowner's bill.

A salesperson may divide the contract payment by the system's total production and present a clean average price such as twenty cents per kilowatt-hour. But the home usually uses less than the system generates in real time, which means the effective cost of the electricity that truly benefits the customer can be far higher.

Under NEM 3.0, extra daytime solar that is not used immediately or stored in the battery can be exported to the grid for only a few cents per kilowatt-hour. The customer may still be paying the PPA provider twenty or thirty cents for every kilowatt-hour the system produced, even when much of that energy had very little value to the home.

That is why these contracts can become dangerous under NEM 3.0: the more low-value daytime export the system creates, the more the homeowner can lose while the sales pitch still sounds cheaper than the utility rate on paper.

If a PPA or lease salesperson does not clearly explain self-consumption, battery fit, export value, and the difference between generation and actual useful usage, that is a major warning sign. In California, those details are often the whole story.