Three Generations of Solar Billing
NEM means Net Energy Metering. California has moved through several versions of the program, changing how homeowners receive credit for excess solar sent to the electric grid.
NEM 1.0
California's original net-energy-metering program allowed qualifying solar customers to receive retail-rate credits for electricity exported to the grid.
NEM 1.0 later closed to new customers as the major investor-owned utilities transitioned to newer programs.
NEM 2.0
NEM 2.0 continued credits based largely on retail electricity rates while adding time-of-use requirements and certain non-bypassable charges.
Existing qualifying NEM 2.0 customers may continue under their applicable legacy tariff, but the program is closed to new applications.
Net Billing
New qualifying systems generally fall under California's Net Billing Tariff, commonly called NEM 3.0 or the Solar Billing Plan.
Electricity used directly in the home can avoid utility purchases, while excess solar exported to the grid receives a separate export credit.
What Does Utility Electricity Cost?
Rates depend on your utility, rate plan, season, time of day, usage level and whether generation is supplied by the utility or a Community Choice Aggregator. These figures are general context only.
Published average residential rates can differ from what an individual customer actually pays based on rate plan and time of use.
Actual customer pricing can vary substantially depending on tariff, time period and household circumstances.
Actual time-of-use prices can differ significantly depending on when electricity is consumed.
What Does the Utility Pay for Excess Solar?
This is where today's system is very different from older net-metering programs.
There Is No Single NEM 3.0 Buyback Rate
Under California's Net Billing Tariff, surplus electricity exported to the grid receives an Energy Export Credit based on the value of that electricity at the particular time it is exported.
Values can change by utility, hour, season, day type, customer vintage and other factors. In many daytime periods, export compensation may be substantially below the retail price a homeowner pays to purchase electricity.
A statement such as “your utility pays 5¢” or “your utility pays 8¢ per kWh” can be misleading because current Net Billing export compensation is not one flat rate. The value depends on when electricity is exported and which utility, tariff and generation provider serve the property.
Why Battery Storage Matters More Today
Under Net Billing, the timing of when energy is produced, consumed and exported matters. Battery storage may help homeowners use more of their own solar energy instead of exporting it during lower-value periods.
Store Daytime Solar
Excess solar can be stored instead of immediately being exported to the utility.
Use Energy Later
Stored energy can be used in the evening or during higher-cost utility periods depending on system design.
Add Backup Capability
Properly configured storage can also provide partial or broader home backup during utility outages.
The figures shown on this page are general educational examples and are not a quote, guarantee or representation of the rate that applies to a particular customer. Electricity prices, export-credit values, utility tariffs, Community Choice Aggregation rates and regulatory requirements can change. Actual results depend on the utility, tariff, location, energy usage, solar production, system design and other project-specific factors.
Let’s Review How the Rules Apply to Your Home
Before recommending solar or battery storage, we can review your electric bill, utility company, current rate plan, energy usage and project goals so the system is designed around the rules and rates that actually apply to you.
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