Under NEM 3.0, California solar exports earn about 3 to 21 cents per kWh in 2026, while grid power costs up to 61 cents at peak. That gap can cost you $1,000 a year or more. This guide shows how export credits work, which PG&E or SCE plan fits, and how to keep NEM 2.0.
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NEM 3.0 California (the Net Billing Tariff) credits solar exports at hourly rates averaging about 3 to 21 cents per kWh in 2026, far below the 24 to 61 cent retail price, so using or storing your solar is now worth more than exporting it.
You opened your utility bill, saw a true-up charge in the hundreds, and wondered why solar did not make it go away. Or you are getting quotes and every installer says something different about NEM 3.0 California rules, export credits, and which rate plan to pick.
This guide is the hub for all of it. You will learn how NEM 3.0 in California (officially the Net Billing Tariff, which PG&E and SCE call the Solar Billing Plan) works in 2026, what PG&E and SCE actually pay for your exports, which time-of-use plan fits your home, and how to keep NEM 2.0 if you already have it.
Here is what this guide covers:
Net metering is a billing rule that credits you for the extra solar power your panels send to the grid, so you pay only for the net amount of electricity you use over a billing period. Under classic net metering, each kilowatt-hour (kWh) you export earns roughly the same value as a kWh you buy, which in California in 2026 is about 24 to 61 cents depending on the plan and hour.
Your utility tracks two numbers through a bidirectional smart meter: energy you pull from the grid and energy you push back. At the end of each month, the credits offset your charges. Leftover credits roll forward until your annual true-up, when the utility settles the account.
Net energy metering (NEM 1.0 and NEM 2.0) credits exports at close to the retail rate. Net billing, which is what California uses for new customers today, credits exports at a separate, lower "export rate" based on what that power is worth to the grid at that hour. The difference sounds technical, but it can change your annual savings by $1,000 or more.
The California Public Utilities Commission (CPUC) argued that paying retail for midday solar shifted grid costs onto households without panels. It adopted the Net Billing Tariff in December 2022, and it applies to every customer who applied for interconnection on or after April 15, 2023, according to the CPUC's net billing tariff page.
Under NEM 3.0 in California, every kWh you export earns an Energy Export Credit that changes by hour, weekday or weekend, and month, and in 2026 those credits average about 3 to 21 cents per kWh for SCE customers. Power you use directly in your home still saves you the full retail rate, which is why self-consumption now matters more than exporting.
Export values come from the CPUC's Avoided Cost Calculator. When you start service, your utility locks that year's price table (SCE calls the 2026 set "NBT26") for nine years. A buyer who later moves into your home pays the current year's export prices, not your locked ones, according to SCE's Solar Billing Plan page.
Net Billing customers pay energy charges every month. Export credits sit in a credit bank and offset eligible charges as they build up, then everything is reconciled at the 12-month true-up. Credits cannot pay taxes, fees, or the new Base Services Charge.
Starting with SCE in November 2025 and PG&E in March 2026, most California households pay a fixed Base Services Charge of about $24 per month, or $6 for CARE and $12 for FERA customers, according to PG&E's March 2026 billing announcement. In exchange, per-kWh prices dropped. Solar exports cannot offset this charge, so even a perfectly sized system will see a monthly bill of at least about $24.
Yes. A state appeals court upheld the Net Billing Tariff in March 2026, and the California Supreme Court declined to review it in June 2026. For the full SCE and SDG&E version of these rules, see our guide to net metering in Southern California under SCE and SDG&E, and for what SCE changed this year, read understanding SCE's Solar Billing Plan.
The single biggest difference between NEM 2.0 and NEM 3.0 is export value: NEM 2.0 credits exports at roughly the retail rate minus about 3 cents of non-bypassable charges, while NEM 3.0 pays hourly export rates that are often 75% or more lower during midday. Here is how the two programs compare in 2026.
| Feature | NEM 2.0 | NEM 3.0 (Net Billing Tariff) |
|---|---|---|
| Who is on it | Systems that applied before April 15, 2023 | Systems that applied on or after April 15, 2023 |
| Export credit | Retail TOU rate minus non-bypassable charges (about 3 cents per kWh) | Hourly Avoided Cost Calculator value, about 3 to 21 cents per kWh on SCE 2026 averages |
| How long it lasts | 20 years from your original interconnection date | Export price table locked 9 years for the original customer |
| Billing | Most charges settled once a year at true-up | Energy charges billed monthly, credits reconciled at true-up |
| Required rate plan | Any eligible TOU plan (for example SCE TOU-D-4-9PM, PG&E E-TOU-C) | PG&E Electric Home (E-ELEC); SCE TOU-D-PRIME |
| Bonus credit | None | Energy Export Bonus Credit for systems started before 2028 (PG&E: $0.009 per kWh in 2026) |
| Best system design | Size solar to cover annual use; battery optional | Size for daytime use plus battery to cover 4-9 p.m. |
If you are comparing payback on the two programs, our breakdown of NEM 2.0 vs NEM 3.0 battery payback walks through the numbers in detail.
In 2026, SCE's Solar Billing Plan pays average export credits of $0.06 per kWh on summer days and $0.21 per kWh on summer evenings (4-9 p.m.), dropping to $0.03 on winter days, according to SCE's Solar Billing Plan page. PG&E's export values run from near zero at spring midday to about $0.91 per kWh in the highest late-summer evening hours, based on its published 2025 price chart.
SCE lists these 2026 averages: summer daytime $0.06, summer evening $0.21, summer overnight $0.12, winter daytime $0.03, winter evening $0.10, and winter overnight $0.10 per kWh. Customers who enroll before 2028 also earn an extra credit of about $0.04 per kWh, or about $0.09 for income-qualified households.
PG&E splits each export credit into a generation part and a delivery part, and most hours fall in the 3 to 7 cent range. Its Energy Export Bonus Credit for residential systems that start in 2026 is $0.009 per kWh, locked for nine years, and it shrinks to $0.004 for 2027 starts, according to PG&E's Solar Billing Plan guide. For hour-by-hour detail, see our guide to PG&E solar buyback rates in 2026 and the companion post on how much PG&E really pays for solar exports.
If you are on NEM 2.0 and produce more than you use over 12 months, the leftover kWh are paid at Net Surplus Compensation, a wholesale-based rate. PG&E's sample true-up shows $0.02965 per kWh, about one-tenth of retail. That is why oversizing a NEM 2.0 system rarely pays.
Yes, but under NEM 3.0 you are selling at a wholesale-style price and buying back at retail. Every kWh you store and use at 6 p.m. is usually worth 3 to 10 times more than exporting it at noon.
For most solar homes with a battery, the best plan is the one with the cheapest off-peak hours and the widest peak-to-off-peak gap: on SCE that is usually TOU-D-PRIME, and on PG&E new solar customers are placed on E-ELEC. NEM 2.0 customers without a battery often do better on SCE TOU-D-4-9PM or PG&E E-TOU-C. The table below shows 2026 rates rounded to the nearest cent, before taxes.
| Plan (peak hours) | Summer (June-Sept) peak / off-peak | Winter (Oct-May) peak / off-peak |
|---|---|---|
| SCE TOU-D-PRIME (4-9 p.m.) | 61 cents weekdays / 26 cents | 45 cents / 30 cents, 24 cents super off-peak 8 a.m.-4 p.m. |
| SCE TOU-D-4-9PM (4-9 p.m.) | 58 cents / 34 cents (24 cents within baseline) | 51 cents / 37 cents, 33 cents super off-peak |
| PG&E E-TOU-C (4-9 p.m. daily) | 52 cents / 40 cents (about 8 cents less within baseline) | 40 cents / 37 cents |
| PG&E E-TOU-D (5-8 p.m. weekdays) | 48 cents / 34 cents | 39 cents / 35 cents |
| PG&E E-ELEC (4-9 p.m., part-peak 3-4 and 9-12) | 55 cents / 33 cents, 39 cents part-peak | 32 cents / 28 cents, 30 cents part-peak |
Sources: SCE TOU-D-4-9PM rates as published for January 2026 (SCE's June 1, 2026 change moved its average residential rate only from 34.5 to 34.4 cents); SCE TOU-D-PRIME rates from SCE's time-of-use page as reported in October 2026; PG&E E-TOU-C and E-ELEC from PG&E's March 1, 2026 rate plan pricing sheet; and E-TOU-D from the PG&E E-TOU-D tariff effective June 1, 2026. All plans now carry the roughly $24 monthly Base Services Charge.
TOU-D-PRIME has the cheapest off-peak power on SCE, about 24 to 30 cents, but a higher summer weekday peak and no baseline credit. It is built for homes with an EV, battery, or heat pump that can push usage away from 4-9 p.m. TOU-D-4-9PM gives you a 10 cent baseline credit and a lower summer peak, which helps NEM 2.0 homes without storage. For the full decision guide, see the best SCE rate plan for solar owners, and for hours and holiday rules, read SCE time-of-use rates explained.
E-TOU-C charges peak prices every day from 4-9 p.m. but includes a baseline credit. E-TOU-D has a shorter peak (5-8 p.m., weekdays only) and lower summer off-peak rates, around 34 cents, which often helps families who are home in the late afternoon and on weekends. If you bought a house that already had solar, our guide to picking the right PG&E rate plan as a new homeowner walks through each option.
E-ELEC is mandatory for PG&E Solar Billing Plan customers and optional for others with an EV, battery, or heat pump. Its winter rates are the lowest on PG&E's menu, as low as 28 cents, which rewards all-electric homes that run heat pumps through the cooler months.
Most surprise true-up bills come from one of three causes: usage grew after the system was sized, too much power was used during the 4-9 p.m. peak, or the account sat for 12 months with charges building up. Because NEM 2.0 settles 12 months of charges at once, adding an EV or pool pump without adding panels can push the true-up into the hundreds of dollars.
Your panels earn credits at midday, but cooking, AC, and EV charging often land in the peak window. Under TOU, a kWh bought at 6 p.m. can cost twice as much as a kWh credited at noon, so the credit bank runs dry even when your annual production matches your use.
NEM 2.0 exports cannot cancel non-bypassable charges, which run about 3 cents per kWh on everything you pull from the grid. Under both programs, the Base Services Charge, taxes, and fees also stay on the bill.
Your monitoring app shows total production, but the utility only sees what crosses the meter. That gap confuses many homeowners. If your numbers do not line up, start with why solar production does not match your utility bill.
Pay a little each month instead of waiting a year, move flexible loads like laundry and EV charging before 4 p.m., and review whether your rate plan still fits your household. For SCE-specific causes and fixes, read why your SCE true-up bill is so high, and for five other common reasons solar homes overpay, see why your solar bill is still high.
You keep NEM 2.0 for 20 years from your system's original interconnection date, and you can usually add up to 10% or 1 kW of solar, whichever is greater, without losing it, according to PG&E's NEM 2.0 FAQ. Anything bigger needs a workaround, such as a separately metered or non-export addition.
If your system is 6 kW, the 1 kW allowance is larger than 10% (0.6 kW), so you could add about 1 kW. For an 18 kW system, 10% gives you 1.8 kW. Go past that limit with exporting panels and the whole system can move to NEM 3.0. Step-by-step options are in our guide to adding solar panels to NEM 2.0 without losing status.
No, as long as the battery is interconnected correctly. A battery that charges only from your solar, or is configured so it cannot export grid power, can be added to an operating NEM 2.0 system through a new interconnection request. Expect a utility application, updated single-line drawings, and a short review. See adding a battery to an existing solar system in California for equipment and permit details.
NEM 2.0 stays with the system, not the owner, so a buyer inherits the remaining years of your 20-year term. In July 2025, the State Senate Energy Committee removed a provision from AB 942 that would have moved homes to NEM 3.0 at sale. During escrow, have your agent request the interconnection date from the utility so the buyer knows how many legacy years remain.
A non-export system is solar (usually with a battery) that is set up so it never sends power to the grid, which lets you add as much capacity as your home can use without changing your NEM status. Because it earns no export credits, every kWh it makes has to be used in the home or stored, and its value comes from avoiding retail rates of 24 to 61 cents.
A power control system (PCS) inside the inverter or battery watches the meter and limits output so nothing crosses back to the grid. The utility still reviews the design under Rule 21 interconnection rules, but it is not enrolled in a net metering tariff. Our explainer on PTO and power control systems covers how utilities approve these setups.
Non-export makes sense for NEM 2.0 homes that want more solar for a new EV or heat pump, and for owners who want backup without new export rules. It is less useful for a brand-new system, since NEM 3.0 export credits, while small, still add value. Our SDG&E-focused guide to NEM 2.0 panel expansion rules compares non-export with other expansion paths.
Under NEM 3.0 in California, a battery typically raises the value of your excess solar from about 3 to 8 cents per kWh exported to roughly 45 to 61 cents per kWh used in the evening peak. That gap is why most new California systems now include storage.
Take a home that uses 9,000 kWh a year with a system sized to produce the same amount. Assume 40% of solar output (3,600 kWh) is used as it is made, worth about 35 cents each, or about $1,260. The other 5,400 kWh are exported. On NEM 2.0, those exports would be worth about 31 cents each, or roughly $1,670. On NEM 3.0, at about 8 cents including the bonus credit, they are worth about $430.
Now add a battery that shifts about 3,150 usable kWh into the 4-9 p.m. window at an average 50 cents. That is about $1,575 of avoided peak cost, minus about $250 of exports you gave up, for a net gain near $1,300 a year. These are illustrative 2026 estimates, not a quote; your result depends on your usage pattern and rate plan. Run your own numbers with our solar savings calculator.
PG&E limits how batteries on the Solar Billing Plan can charge from the grid and export at the same time, which affects how you program your system. Read why PG&E won't let you charge and export your solar battery before you set your battery's operating mode.
Panel quality matters more under NEM 3.0, because you are relying on daytime production to fill the battery. US Power installs American-made Qcells panels from Dalton, Georgia, and you can compare factory-direct Qcells pricing before you get a quote.
You cannot turn on your system or start earning credits until the utility grants Permission to Operate (PTO), which often arrives within a few weeks of the city's final inspection when paperwork is clean. Your NEM or Net Billing start date, and your true-up month, begin from that approval.
SCE reviews the interconnection application, confirms the inspection sign-off, and may swap or reprogram your meter before issuing PTO. If you are stuck waiting, here is what to do during SCE solar PTO delays.
Most California homes already have a smart meter that can record two-way flow, so the utility often reprograms it remotely. Some older or non-standard meters are physically replaced at no charge. Our guide to whether you need a new electric meter for solar explains which situations require a swap.
Your first solar bill will look different: a credit bank balance, an energy export credit line, and the $24 Base Services Charge. Under the Net Billing Tariff you will pay a monthly amount, so do not expect a $0 bill in month one.
Outside California, net metering ranges from full retail credit in Florida, New Jersey, and Pennsylvania to no statewide rule at all in Texas. Here is a quick 2026 snapshot for the other six states US Power serves.
| State | How exports are credited in 2026 | What it means for you |
|---|---|---|
| Texas | No statewide net metering; buyback depends on your retail electricity plan | Shop for a solar buyback plan; batteries help where buyback is low |
| Florida | Full retail net metering for FPL, Duke and TECO under PSC Rule 25-6.065; annual excess paid at avoided cost | Size to annual use; storage is mainly for outages |
| Illinois | New ComEd and Ameren customers since 2025 get supply-only credits (about 7 to 8 cents per kWh) | Self-consumption and the state smart inverter rebate matter more |
| Connecticut | Residential Renewable Energy Solutions program with a netting or buy-all option | Pick the tariff that fits your usage at signup |
| New Jersey | Retail net metering with an annual true-up, plus SuSI incentive payments | Strong value for exported solar |
| Pennsylvania | Retail net metering; annual excess paid at the price to compare | Size to annual use for the best payback |
Rules outside California are changing too, so check your utility's current tariff before you sign. The federal residential solar tax credit also ended for homeowners on December 31, 2025, so savings in every state now depend more on billing rules and system price.
NEM 3.0 California rules cut the value of midday exports to a few cents, but solar still saves you the full retail rate on every kWh you use yourself, and a battery can turn 3 cent exports into 45 to 61 cent savings. If you are on NEM 2.0, protect your 20-year term by staying inside the 10% or 1 kW expansion limit or going non-export. Either way, the right rate plan can be worth hundreds of dollars a year.
US Power starts every consultation with a real 12-month bill analysis, so your system and rate plan are matched to how your home actually uses power. You get factory-direct Qcells pricing 15-20% below market, a 25-year comprehensive warranty, and a 3-4 week install to PTO. To see what solar and storage would do for your bill, book your free 12-month bill analysis.
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