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Adding panels without losing NEM 1.0 / 2.0
Updated August 7, 2026 · using the CPUC legacy-NEM expansion threshold · by Cali Energy
How much solar can you add without losing NEM 1.0/2.0 in California? The greater of 1 kW or 10% of your original system. So a 6 kW system can add up to ~1 kW, and a 12 kW system up to ~1.2 kW. Stay at or under that and you keep your legacy net-metering terms; exceed it and the whole system moves to NEM 3.0. Utility approval is still required.
✓ Uses the CPUC expansion threshold (greater of 1 kW or 10%). See the rule ↓
Threshold = the greater of 1 kW or 10% of your original size.
Confirmed for SCE; PG&E and SDG&E follow the same CPUC framework — confirm exact terms with your utility. LADWP has separate municipal rules.
The rates and figures this calculator usestap to verify
The threshold is a simple rule, but the consequence of crossing it is big. Here is the rule it applies and what still holds true either way.
| Threshold | the greater of 1 kW or 10% of your original system |
| At or under | keep your NEM 1.0 / 2.0 terms |
| Over the threshold | the whole system moves to NEM 3.0 (net billing) |
| Utility approval | required — a revised interconnection application |
| Adding a battery only | generally does not change your NEM status |
California’s IOUs (PG&E, SCE, SDG&E) let a legacy NEM 1.0/2.0 customer expand by the greater of 1 kW or 10% of the original system without losing their grandfathered terms (CPUC Decision D.22-12-056). Exceed that and the entire system transitions to NEM 3.0 (net billing). Adding a battery alone generally doesn’t affect status. This estimates the threshold from your original size — utility approval and a revised interconnection application are still required, and exact wording (especially PG&E/SDG&E) should be confirmed with your utility before you expand.
Example results you can reproduce
Each row is the greater of 1 kW or 10% of the original size — enter the same size above to reproduce it.
| Original system | 10% | Expansion threshold |
|---|---|---|
| 4 kW | 0.4 kW | ~1 kW (the 1 kW floor) |
| 6 kW | 0.6 kW | ~1 kW (the 1 kW floor) |
| 12 kW | 1.2 kW | ~1.2 kW |
| 20 kW | 2.0 kW | ~2 kW |
How this calculator works
It takes your original system size, computes 10% of it, and returns whichever is larger — that number or 1 kW. Stay at or below the result and California’s legacy-NEM rule lets you keep your grandfathered terms; go over by any amount and the entire system re-enrolls on NEM 3.0. It’s the threshold only; your utility still has to approve the change.
How to read your result
The number is a ceiling, not a permit. Adding up to it preserves your legacy tariff (worth a lot on NEM 1.0/2.0); adding even a little more forfeits it for the whole array, not just the new panels — usually a bad trade. If you need substantially more production, model the economics on NEM 3.0 first, because that’s what your whole system would move to.
What moves the result the most
Your original system size, and the 1 kW floor. For any system under 10 kW, 10% is less than 1 kW, so the flat 1 kW allowance governs; above 10 kW, the 10% figure takes over. Either way, crossing the line is the expensive part — it’s all-or-nothing for your grandfathered status.
Common questions
How much solar can I add and keep NEM 2.0?
The greater of 1 kW or 10% of your original system. For most homes under 10 kW, that’s about 1 kW.
What happens if I go over the threshold?
The entire system — old panels included — transitions to NEM 3.0 (net billing), where exports are worth much less. It’s not just the added panels that change.
Does adding a battery count against the threshold?
Generally no — adding storage to an existing solar system doesn’t change your NEM status, as long as you don’t also grow the solar past the threshold.
Do I still need utility approval?
Yes — any expansion requires a revised interconnection application and utility sign-off, even a small one that stays under the threshold.
How do I know which NEM version I’m on?
Check the tariff named in your interconnection documents. A qualifying NEM 2.0 application generally had to be submitted by April 14, 2023 (PTO could come later); much earlier systems may be NEM 1.0. See how long it lasts with our NEM 2.0 grandfathering calculator.
Is it ever worth losing NEM 2.0 to expand?
Rarely — the legacy tariff is valuable. If you truly need more production, model it on NEM 3.0 (plus a battery) before giving up grandfathered terms for the whole system.
Sources
- SCE — Solar / Net Energy Metering FAQ (expansion rule)
- CPUC — Net Energy Metering and Net Billing
- PG&E — Solar Billing Plan
Estimates only, not a quote. Assumptions, rates, incentives and program rules can change — confirm current details with your utility, the program administrator or a licensed professional.
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