NEM 3.0, explained with the numbers your utility actually pays

NEM 3.0 — officially the Net Billing Tariff — is California's solar compensation policy for customers of the three investor-owned utilities (PG&E, SCE, SDG&E), in effect for systems submitted after April 14, 2023. Instead of full retail credit for exported solar, exports are paid at 'avoided cost' rates that average roughly $0.05–$0.08 per kWh, about 75% less than under NEM 2.0.

No — and this is the most misunderstood part. NEM 3.0 only governs the CPUC-regulated investor-owned utilities: PG&E, SCE, and SDG&E. Municipal utilities set their own rules: LADWP still credits exports at full retail rates ($0.22–$0.37/kWh), SMUD pays a flat 9.6¢/kWh under its Solar and Storage Rate (as of June 2026), Pasadena's PWP still offers traditional net metering, while Burbank's BWP moved to avoided-cost net billing in January 2026 and Roseville Electric pays 6.91¢/kWh under Solar 2.0.

If your interconnection application was submitted before April 15, 2023, you keep NEM 2.0's full retail credits for 20 years from your original interconnection date. You can lose grandfathered status by significantly expanding your system or letting it transfer incorrectly during a home sale — additions and transfers should be handled by an installer experienced with NEM 2.0 preservation.

Usually yes, but the strategy changed. Because exports earn ~$0.05–$0.08/kWh while peak grid power costs $0.40–$0.70/kWh, the value now comes from self-consumption: using or storing your own solar instead of exporting it. Solar-plus-battery systems in SDG&E territory still achieve roughly 7–10 year paybacks against the highest utility rates in the country.

Strongly recommended for IOU customers. A battery stores midday production and discharges during the 4–9 PM peak, capturing retail value (up to $0.70/kWh in SDG&E territory) instead of the export rate (~$0.05–$0.08). That typically adds 30–40% to total savings versus solar alone. On full-retail-credit utilities like LADWP, a battery is optional for bill savings and mainly adds outage backup.

Avoided cost is what the utility estimates it would have paid to procure that electricity elsewhere — a wholesale-anchored value that changes by hour, month, and year under the CPUC's Avoided Cost Calculator. A small number of evening hours in September pay several dollars per kWh, but the annual average lands around $0.05–$0.08 for typical solar export profiles.

Under net billing you'll see two flows: energy delivered (what you drew from the grid, billed at your retail rate) and energy received (what you exported, credited at avoided-cost rates). Charges settle monthly, with an annual true-up for any remaining balances. The single most useful number is your self-consumption percentage — the share of your solar you used directly or via battery rather than exported.

Among major Sun Belt markets: Colorado (Xcel Energy) and Florida's investor-owned utilities (FPL, Duke Energy Florida, TECO, FPU) still credit exports at the full retail rate. Nevada pays 75% of retail. California's IOUs, SRP in Arizona, and most municipal utilities have moved to avoided-cost or fixed export rates well below retail.

Texas has no statewide net metering mandate. In deregulated areas (Oncor/Dallas, CenterPoint/Houston), your retail electricity provider sets the buyback rate — plans range from ~7¢/kWh fixed to full retail-match. Outside deregulation, each utility sets its own tariff: Austin Energy credits all production at its ~9.7¢ Value of Solar rate, Garland's GP&L pays 8.19¢, Georgetown uses buy-all/sell-all, and Entergy Texas runs Schedule SQF.

APS credits exports under its Resource Comparison Proxy rate — roughly 7–8¢/kWh, locked for 10 years at interconnection but declining ~10% per year for new sign-ups. SRP pays a fixed ~3.45¢/kWh on its TOU Export plan, which makes self-consumption and load-shifting the dominant strategy in SRP territory (Mesa, Tempe, Chandler, Gilbert).