In California, the “Golden Age” of solar has entered a new chapter. On April 15, 2023, the California Public Utilities Commission officially transitioned from NEM 2.0 to NEM 3.0, also known as the Net Billing Tariff.

If you are a homeowner in 2026 considering solar, the rules have changed — but the opportunity for long-term savings is still very real.

What Is NEM 3.0?

Net Energy Metering (NEM) determines how much your utility pays you for the excess electricity your solar system sends back to the grid.

Under NEM 2.0, exported energy received nearly full retail credit, often $0.30 to $0.40 per kWh.

Under NEM 3.0, export credits are based on “avoided cost,” typically only $0.05 to $0.08 per kWh — a reduction of about 75%.

The result is simple: exporting power to the grid is no longer very profitable.

How NEM 3.0 Affects Solar Customers

There are three major impacts for new solar owners:

1. Longer Payback for Solar-Only Systems
Without a battery, systems may now take 9 to 13 years to break even instead of 5 to 6.

2. The Shift to Self-Consumption
The goal is no longer exporting energy, but using as much of your own solar power as possible inside your home.

3. Mandatory Time-of-Use Rates
Electricity is most expensive between 4 PM and 9 PM, making energy storage more valuable than ever.

How to Win Under NEM 3.0

Add Battery Storage
A battery allows you to store daytime energy and use it during expensive evening hours, improving ROI and providing backup power.

Right-Size Your System
Systems should match your real usage, especially if you plan to add an EV or heat pump.

Use the Export Compensation Adder
PG&E and SCE customers receive a temporary export bonus that declines each year, rewarding earlier adoption.

Is Solar Still Worth It in 2026?

Yes. Even under NEM 3.0, solar remains one of the best defenses against rising utility rates.
The most successful systems today combine solar + battery storage for long-term savings and energy independence.