What is NEM 3.0 in California?

NEM 3.0 (officially Net Billing Tariff) replaced NEM 2.0 in California for new solar customers connecting to PG&E, SCE, or SDG&E starting April 14, 2023. Solar exports earn the Avoided Cost Calculator (ACC) rate — typically $0.05–$0.08/kWh — instead of the retail rate of $0.32/kWh, a roughly 75% reduction.

Is solar still worth it in California with NEM 3.0?

Yes for most homes, but only with a battery. Without storage, payback stretches from 6–7 years (NEM 2.0) to 11–13 years (NEM 3.0). Adding a 10–13 kWh battery boosts self-consumption to 85% and restores 7–8 year payback.

How much does a battery add to NEM 3.0 solar?

A typical 10–13 kWh battery costs $11,000–$15,000 installed. Combined with 30% federal ITC reducing it to $7,700–$10,500 net. Batteries are also eligible for SGIP rebates in some California areas.

Should I lock in NEM 2.0 if I can?

NEM 2.0 grandfathering ended April 14, 2023. New customers cannot enroll. If you submitted a complete interconnection application before that date, you have NEM 2.0 protection for 20 years from PTO.

California NEM 3.0 Calculator — How Much Does It Cost You?

NEM 3.0 cut California solar export rates by 75%. See exactly how it affects your payback — and how much a battery brings back.

What is NEM 3.0?

NEM 3.0 — officially the Net Billing Tariff — replaced California's Net Energy Metering 2.0 program on April 14, 2023. Under NEM 2.0, every kWh you exported to the grid was credited at the full retail electricity rate (~$0.32/kWh in 2024). Under NEM 3.0, exports are credited at the Avoided Cost Calculator (ACC) rate, which averages roughly $0.05–$0.08/kWh — a 75–80% reduction.

Who's affected?

NEM 3.0 applies to new residential solar customers of:

PG&E (Pacific Gas & Electric — Northern + Central California)
SCE (Southern California Edison — Southern inland California)
SDG&E (San Diego Gas & Electric — San Diego County)

Municipal utilities like LADWP (Los Angeles), SMUD (Sacramento), and Roseville Electric are not subject to NEM 3.0 — they continue with their own (typically more solar-friendly) net metering programs.

How NEM 3.0 changes your math

Before NEM 3.0, a 7 kW system in California producing ~11,000 kWh/year would generate ~$3,500/year in savings, regardless of self-consumption percentage, because exports earned the same $0.32/kWh as you'd pay for imports. Payback: 6–7 years.

After NEM 3.0, that same system saves only $2,200/year if self-consumption is 45% (typical without battery). Payback stretches to 11–13 years.

How a battery restores payback

Adding a 10–13 kWh battery (Tesla Powerwall 3, Enphase IQ Battery 5P, Franklin aPower) lifts self-consumption from ~45% to ~85% by storing midday production for evening peak hours. The battery effectively converts low-value exports into high-value self-use.

Battery cost: $11,000–$15,000 installed (most California installers in 2026)
Federal ITC 30%: −$3,300–$4,500
SGIP rebate (some areas, low-income or fire-zone): −$1,000–$2,000
Net battery cost: $5,500–$11,500

With battery, NEM 3.0 payback restores to 7–8 years — within 1–2 years of legacy NEM 2.0. Long-term lifetime savings drop ~10% compared to NEM 2.0, but solar still beats the alternative of paying retail rates for everything.

Time-of-use rate plans matter more than ever

Under NEM 3.0, exporting at peak hours (4–9 PM) earns the peak ACC rate, which is higher than midday off-peak ACC. Solar systems that include battery + smart export logic (charging midday, exporting evening) capture this peak premium — sometimes restoring effective export rates to $0.20+/kWh.

Talk to your installer about time-of-use rate plans (E-TOU-D for PG&E residential is the standard) and battery export scheduling.

NEM 3.0 grandfathering

Customers who completed interconnection applications before April 14, 2023, are grandfathered into NEM 2.0 for 20 years from their permission-to-operate (PTO) date. After April 14, 2023, no new NEM 2.0 enrollments are possible.

Should you wait for batteries to get cheaper?

Battery prices have dropped roughly 40% from 2022 to 2026 and are projected to drop another 15–25% by 2028. Counter-argument:

You're missing self-consumption savings every month you wait — at $0.32/kWh that's $150–$250/month for an average solar+battery user
The 30% federal ITC steps down after 2032 — it's unlikely to be more generous in 2028
Electricity rates in California rose 10–15% in 2024–2025 alone; another 8% projected for 2026

Net-net: most analysis says install now if you've already decided. Waiting 1–2 years saves ~$1,500–$3,000 on battery cost but loses $3,000+ in delayed savings.