Solar terms
Solar & net metering.
NEM 3.0 (Net Energy Metering 3.0)
California’s residential solar rate structure for systems interconnecting with investor-owned utilities (SCE, PG&E, SDG&E) after April 14, 2023. Solar exports are credited at the avoided-cost rate (~$0.05-0.08/kWh) instead of retail rate (~$0.25-0.40/kWh). Battery storage is essentially required for reasonable payback. LADWP customers operate under NEM 1.0 / 2.0 legacy rules that are more favorable.
NEM 2.0 (Net Energy Metering 2.0)
Legacy net metering rate structure. Customers who installed solar with interconnection applications submitted before April 14, 2023 (and approved before April 13, 2024) maintain NEM 2.0 status for 20 years from PTO (Permission to Operate). NEM 2.0 credits exports at retail rate minus non-bypassable charges. Most LADWP customers operate under similar legacy terms.
Federal Solar ITC (Investment Tax Credit)
For residential systems placed in service through December 31, 2025, the federal tax credit may be available, subject to eligibility and current law, on the installed cost of solar panels, solar-plus-battery systems, and stand-alone batteries (Tesla Powerwall, Enphase IQ Battery). Under current law this residential credit is no longer available for new projects placed in service in 2026. Confirm current eligibility with your tax professional; Home Upgrade Specialist is not a tax advisor.
PTO (Permission to Operate)
The utility-issued certificate authorizing a residential solar system to interconnect with the grid and export power. LADWP and SCE both issue PTO after final inspection. Your NEM grandfathering date is the PTO date, not the install date.
SolarAPP+
National Renewable Energy Laboratory’s automated solar permitting platform. Cities that participate (Santa Monica, San Jose, Tucson, etc.) issue residential solar permits in 24-48 hours through SolarAPP+ vs the typical 2-4 week manual permitting process.
kW DC vs kW AC
kW DC (direct current) is the nameplate rating of solar panels at standard test conditions. kW AC (alternating current) is the post-inverter rating that actually feeds your home and the grid. AC is typically 80-85% of DC. When a contractor quotes “7kW system” they usually mean DC.
Self-consumption ratio
The percentage of solar production used directly in your home (vs exported to the grid). Under NEM 3.0, self-consumption ratio matters enormously because grid export rates are low. A solar-only system might self-consume 30-40%; adding a battery pushes this to 80-95%.
Microinverters vs string inverters
String inverters convert DC from multiple panels at one point (cheaper, faster shutdown if one panel fails). Microinverters (Enphase IQ series) sit on each panel for panel-level optimization (more expensive, better shading performance, 25-year warranty). Tesla Powerwall 3 has a built-in solar inverter, eliminating the need for a separate string inverter.