Your evening use, not your total
The saving comes from power you would otherwise buy at peak. A house that is empty until eight and then runs everything has a very different case from one that uses power steadily all day.
What changed, what it did to solar payback, and how to work out whether storage is worth it for your house.
NEM 3.0 — formally the Net Billing Tariff — is the California net metering rule for solar systems interconnected after April 2023. It changed one number, and that number changed everything about how solar pays for itself.
Under the old rules, power you sent to the grid earned close to what you paid for it. Under NEM 3.0 it earns roughly a quarter of that. Your panels still produce exactly what they always did. What they produce is simply worth far less the moment it leaves your property.
That is the whole story, and everything below is the detail. A battery is how you stop giving your power away and buying it back.
The one number that changed
Before NEM 3.0, exported power was credited at close to the retail rate — around 30 cents per kWh. Under the Net Billing Tariff, exports are valued at the grid's avoided cost instead, which averages roughly 8 cents. That is about a 75% reduction in what your surplus is worth.
Meanwhile the price you pay has not moved in your favour. California's average residential rate is around 35 cents per kWh, roughly double the national average, and on a time-of-use plan the evening peak runs far higher than that.
Your panels produce most at midday, when nobody is home. You need power most at seven in the evening, when they have stopped. NEM 3.0 turned that timing mismatch into the main cost of owning solar.
Export credits are also no longer a single figure. They follow the CPUC's Avoided Cost Calculator hour by hour, varying by time of day, day of week and season — hundreds of possible combinations across a year. Tracking that manually is not realistic, which is a large part of why storage became standard rather than optional.
Where you stand
Which tariff you are on depends on when your system received permission to operate, and on who supplies your power.
| Your situation | Tariff | What it means |
|---|---|---|
| Solar interconnected before 15 April 2023 | NEM 2.0 | Near-retail export credit, generally for 20 years from your permission-to-operate date. Protection transfers if you sell the house. |
| Solar interconnected after 15 April 2023 | NEM 3.0 | Exports credited at avoided cost, well below retail. Storage is what recovers the difference. |
| No solar yet | NEM 3.0 | NEM 2.0 is closed. The transition window for legacy terms ended in April 2026, so any new system enrols on the Net Billing Tariff. |
| On NEM 2.0, considering a battery | Depends on scope | Adding storage can be done without disturbing your legacy terms, but it depends on the installation scope. Get this checked before anyone touches the array. |
| SMUD, LADWP or another municipal utility | Own rules | NEM 3.0 applies to PG&E, SCE and SDG&E. Municipal utilities set their own terms, which are often more favourable. |
If you are not certain which tariff you are on, your interconnection agreement or your utility account will say. We check it as part of any assessment, because it changes the answer completely.
The part that catches people
Under NEM 3.0 your account settles on an annual true-up. Any export credits left over at the end of that cycle expire. There is no cheque for over-production.
This is why oversizing an array under the new rules is a poor trade. Generation you cannot use and cannot bank is worth almost nothing, and it is also why the first true-up bill surprises so many households who assumed their credits had been quietly accumulating all year.
Sizing to roughly your actual annual consumption, and storing the daily surplus rather than exporting it, is the design that works under this tariff.
Working it out
A battery is not automatically the right answer. It depends on when you use power, what tariff you are on, and what you actually want from it. Four things decide it.
The saving comes from power you would otherwise buy at peak. A house that is empty until eight and then runs everything has a very different case from one that uses power steadily all day.
The wider the spread between peak and off-peak, the more storage is worth. SDG&E customers see the largest spread in the state; the picture differs on every tariff.
Keeping the lights on in an outage has real value, but it is not a bill saving. Mixing the two produces payback figures that do not survive contact with reality.
Not a rule of thumb and not a state average. Your bill, your tariff, your utility, your usage pattern. Anything else is guesswork with a logo on it.
Rates quoted here are drawn from published 2026 utility tariffs and move over time. Yours will be specific to your plan and season.
Our method
We start with your bill rather than a satellite photo of your roof, because the tariff matters more than the roof does under this ruleset.
Which utility, which rate plan, which peak window, and whether you are on NEM 2.0 or NEM 3.0. Everything else depends on this.
How much of your consumption falls inside the expensive hours. This is the number a battery actually moves.
Enough capacity to carry your evening. Oversizing costs money and, under the annual true-up, earns nothing back.
We give you the tariff arbitrage on its own first. Any rebate is shown separately, and only if it has been confirmed.
Daytime-heavy households on flat rates sometimes do not have a case. We would rather say so than sell you a battery you will resent.
Every figure we put in front of you comes from your own bill and your own tariff. We do not use state averages to sell equipment.
What a battery will not do
Most systems substantially reduce a bill rather than remove it. Fixed charges remain, generation drops in winter, and there are days when a battery simply cannot carry the whole load. Anyone promising a zero bill is describing an unusual case as though it were typical.
What storage does reliably is move your consumption out of the expensive hours and keep your own generation on your own property. Under this tariff, that is where the return lives.
Rates are also still climbing. Over the five years to March 2026, average residential rates rose 39% at SCE, 57% at PG&E and 43% at SDG&E, according to the CPUC's Public Advocates Office. Every increase widens the gap a battery is closing.
Send us a recent utility bill and we will tell you:
No obligation, and no sales call unless you ask for one. If the numbers do not work on your house, we will say so.
Get in contact ↗Export credits, retail rates, peak windows and tariff rules change, and figures on this page are indicative of published 2026 utility tariffs rather than a quotation. Your results depend on your utility, rate plan, usage pattern, system size and season. NEM 3.0 applies to PG&E, SCE and SDG&E customers; municipal utilities operate separate programmes. Current tariff details can be confirmed with your utility or at cpuc.ca.gov.
The saving comes from the power you would otherwise buy at peak. A household that is empty until eight in the evening and then runs everything at once has a very different case from one that uses power steadily through the day.
he wider the gap between peak and off-peak on your tariff, the more a battery is worth. [VERIFY: which rate plans your customers are typically on and which are most favourable to storage]
Backup value is real but it is not a bill saving, and mixing the two produces payback numbers that do not survive contact with reality. Work out the financial case first, then decide what you would pay on top for resilience.
Not a rule of thumb. Your bill, your rate plan, your utility, your usage pattern.
NEM 3.0, formally the Net Billing Tariff, is the California net metering rule applying to solar systems interconnected after April 2023. It compensates exported power at a rate well below the retail price you pay for grid power.
Pharetra pretium est dignissim nulla vivamus imperdiet adipiscing rhoncus sapien consequat. Faucibus pharetra feugiat dignissim et vel scelerisque pellentesque praesent. Iaculis habitasse augue scelerisque duis enim.
Under NEM 3.0, usually yes if you want the system to pay back reasonably. Because exports earn far less than retail, the value is in storing your own generation and using it at peak.
It can be, particularly for households that use most of their power during daylight hours. But the payback is slower than it was under earlier net metering rules, and for most households the battery is what restores the economics.
It depends on when your system was interconnected. Systems interconnected before April 2023 are generally on NEM 2.0 for the remainder of their legacy period; anything after is on NEM 3.0.
Pharetra pretium est dignissim nulla vivamus imperdiet adipiscing rhoncus sapien consequat. Faucibus pharetra feugiat dignissim et vel scelerisque pellentesque praesent. Iaculis habitasse augue scelerisque duis enim.
Pharetra pretium est dignissim nulla vivamus imperdiet adipiscing rhoncus sapien consequat. Faucibus pharetra feugiat dignissim et vel scelerisque pellentesque praesent. Iaculis habitasse augue scelerisque duis enim.
Not usually. Most systems substantially reduce a bill rather than remove it, because of fixed charges, seasonal variation and days when generation is low. Anyone promising a zero bill is describing an unusual case as though it were typical.
Pharetra pretium est dignissim nulla vivamus imperdiet adipiscing rhoncus sapien consequat. Faucibus pharetra feugiat dignissim et vel scelerisque pellentesque praesent. Iaculis habitasse augue scelerisque duis enim.
Pharetra pretium est dignissim nulla vivamus imperdiet adipiscing rhoncus sapien consequat. Faucibus pharetra feugiat dignissim et vel scelerisque pellentesque praesent. Iaculis habitasse augue scelerisque duis enim.