California changed how rooftop solar is credited. If you are thinking about solar or adding a battery, it helps to know the basics before you talk to installers.
What is NEM 3.0 / net billing?
For customers of the three large investor-owned utilities (PG&E, SCE and SDG&E), new solar systems that applied after April 14, 2023 are on the Net Billing Tariff, often called NEM 3.0. Under it, power you send back to the grid is credited at export values that are generally much lower than the retail price you pay for power you use. Systems that applied earlier generally stay on their older net metering plan for a set period.
Why do batteries matter more now?
Because exports earn less, solar saves the most when you use the power yourself. A battery stores daytime solar for the evening, when electricity often costs the most, and it can also provide backup power in outages.
What about SMUD and other utilities?
Municipal and other utilities, such as SMUD and many city utilities, set their own solar rates and rules. Ask your utility or installer for the current plan for your area.
What should I ask a solar installer?
- Which utility plan will my system be on, and what export value did you assume?
- Does my panel need an upgrade or a main breaker derate? (see panel readiness)
- Who handles the permit, the inspection and the utility interconnection?
- What happens to my system if I re-roof? (panels may need to come off)
Common questions
What is NEM 3.0 in California?
NEM 3.0 is the common name for the Net Billing Tariff that applies to new rooftop solar customers of PG&E, SCE and SDG&E who applied after April 14, 2023. Exported power is credited at lower export values than older net metering.
Does NEM 3.0 apply to SMUD customers?
No. SMUD and other municipal utilities set their own solar rates. Check your utility for current rules.
General information for California homes under the California Electrical Code (based on the NEC). Local rules and inspectors can vary. Not a substitute for an on-site inspection. Never work inside a panel, at the meter or on live circuits.