Chapter 5 · California Policy — NEM 3.0 in Depth
5.8 How to upgrade a legacy NEM 1.0 / 2.0 system without losing grandfathering
California rule: expanding system capacity by more than the lesser of 10% or 1 kW forces the entire system onto NEM 3.0.
For legacy homeowners, this creates a deadlock:
- The original system is too small (builder-installed ones are often only 4–5 kW).
- They want a battery but want to keep NEM 2.0 export pricing.
- Their original contract is PPA / Lease, so they have no authority to modify it.
The clean solution: install a completely separate Non-export system —
- The new system uses a CT clamp to power household load only and never exports.
- The old system's NEM 2.0 grandfathering is not touched.
- The old system continues earning 1:1 credits for what it exports. The new system covers whatever the old one can't.
- California regulation explicitly permits this kind of "parallel but non-exporting" interconnection.
This is the only way to expand capacity without losing NEM 2.0 grandfathering.
← Previous
5.7 Why Non-export (don't sell back at all) can be the smarter choice
Next →
5.9 Areas of California not on NEM 3.0
Next Step
Questions after reading this section? Send us your utility bill — we will come back within one business day with a recommendation specific to your situation.