California's NEM 3.0: What Solar Owners Need to Know in 2026
Net Energy Metering 3.0 changed the economics of rooftop solar in California. Here's a plain-English breakdown of what changed, who it affects, and how to adapt.
What Changed With NEM 3.0?
California's Public Utilities Commission introduced NEM 3.0 (also called Net Billing) in April 2023. The key change: export rates dropped by roughly 75% compared to NEM 2.0 for most customers.
Under NEM 2.0, utilities credited you at the full retail rate for every kWh you exported to the grid. Under NEM 3.0, credits are based on the Avoided Cost Calculator (ACC) — which values exports much lower, especially during midday hours when solar generation peaks.
Who Is Affected?
- New solar customers who applied after April 14, 2023 fall under NEM 3.0
- Existing NEM 1.0 and 2.0 customers are grandfathered for 20 years from their interconnection date
How to Adapt Your System
1. Add Battery Storage
Batteries are now the single most effective way to maximise the value of your solar under NEM 3.0. Storing excess midday generation and using it during evening peak hours (when grid rates are highest) dramatically improves your economics.
2. Shift Loads to Daytime
Run dishwashers, washing machines, EV chargers, and other large appliances during peak solar hours to self-consume as much generation as possible.
3. Get a System Performance Audit
If your system is underperforming, you're exporting energy at low NEM 3.0 rates instead of self-consuming at full retail value. A professional performance test can identify losses and improve your self-consumption ratio.
