If you are a California homeowner considering solar in 2026, the economic rules have fundamentally shifted. Under the California Public Utilities Commission (CPUC) Net Billing Tariff (NBT)—commonly referred to as NEM 3.0—customers of PG&E, SCE, and SDG&E must approach solar with an entirely new strategy.
1. The Shift from Net Metering to Net Billing
Under the historical NEM 2.0 framework, homeowners enjoyed a 1:1 retail credit for excess solar electricity exported to the grid. If you paid $0.35/kWh to import power, the utility credited you $0.35/kWh for your daytime overproduction. NEM 3.0 permanently ended this parity.
Today, export credits are calculated using the CPUC "Avoided Cost Calculator" (ACC). On average, daytime export compensation is reduced to just $0.05 to $0.08 per kWh. However, electricity purchased from the utility during evening peak hours costs between $0.45 and $0.65 per kWh.
| Metric | Old NEM 2.0 | Current NEM 3.0 (2026) |
|---|---|---|
| Daytime Export Credit | ~30¢ - 35¢ / kWh | ~5¢ - 8¢ / kWh |
| Solar-Only Payback | 4 - 6 Years | 9 - 12 Years |
| Solar + Battery Payback | 7 - 9 Years | 6 - 8 Years |
| Optimal Strategy | Maximum Grid Export | 100% Home Self-Consumption |
2. Why Batteries are Essential in California
Because sending power to the grid during the day yields negligible returns, the key to maximizing solar ROI is self-consumption. By pairing a high-performance battery (such as a Tesla Powerwall 3 or Enphase IQ 5P) with your array, you capture 100% of your excess daytime generation.
When the sun sets and utility rates skyrocket into the 4 PM – 9 PM On-Peak Time-of-Use (TOU) window, your home automatically runs off the stored battery power, avoiding the utility's $0.50+/kWh charges entirely.