Net Energy Metering 3.0 (officially called the Net Billing Tariff) is California's updated policy for how solar homeowners are compensated for the excess energy they send back to the grid. It went into effect in April 2023 and fundamentally changed the economics of going solar in the state.
Under the previous NEM 2.0 policy, homeowners received nearly full retail credit for every kilowatt-hour they exported to the grid. Under NEM 3.0, those export credits have been reduced by approximately 75%. This means the value of solar energy you send back to the grid is significantly lower than before.
How Does This Affect Your Savings?
The key takeaway is not that solar is less valuable — it is that how you use solar has changed. Under NEM 3.0, the economics strongly favor:
Self-consumption: Using as much of your solar energy as possible during the day, rather than exporting it. This means running your dishwasher, laundry, and EV charger during peak solar production hours.
Battery storage: Pairing solar with a battery system like the Tesla Powerwall or Enphase IQ Battery allows you to store excess energy and use it in the evening when rates are highest. Under NEM 3.0, battery storage has gone from a "nice to have" to a near-essential component.
Time-of-use optimization: SCE's time-of-use rates mean electricity costs more during peak evening hours (4-9 PM). With battery storage, you can avoid these expensive periods entirely.
The Numbers Still Work — Especially with a zero-down program
Despite the NEM 3.0 changes, solar remains an excellent option for California homeowners. Here's why:
- SCE rates continue to climb: Southern California Edison has increased residential rates by an average of 8-12% annually. Locking in your energy costs with solar protects you from decades of rate increases.
- The 2026 zero-down program advantage: The residential tax credit (Section 25D) expired on December 31, 2025. However, through a $0-down $0-down solar program, the commercial provider claims the Section 48E Commercial Credit and passes the savings to you as a lower, locked-in electricity rate. You get the financial benefit without any upfront cost or tax paperwork.
- Battery incentives are available: California's Self-Generation Incentive Program (SGIP) offers additional rebates for battery storage systems, making the combined solar-plus-battery zero-down program package even more compelling.
What Should You Do?
If you've been considering solar, the message is clear: the sooner you act, the better. Every month you wait, you're paying SCE's rising rates instead of generating your own power. The 2026 zero-down program model makes solar accessible with $0 down, no maintenance responsibility, and immediate savings from day one.
The average California homeowner with a $200+ monthly utility bill can expect to save 30-50% on their electricity costs through a properly structured zero-down program with battery storage.
Ready to see what solar can save you? Take our 60-second Solar Savings Quiz to check your personalized 2026 zero-down program rate — it's free, and there's no obligation.