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California NEM 3.0, Explained for Homeowners

Published June 28, 2026 · By HelioPanels Editorial

If you’re in California, NEM 3.0 is the single most important policy to understand before going solar - it changed the economics more than anything else in years. Here’s the plain-English version.

What NEM 3.0 is

NEM 3.0 (officially the Net Billing Tariff) is California’s rooftop-solar compensation rule for systems that applied after April 15, 2023. It replaced the older, more generous net metering.

The core change: under the old rule, power you exported to the grid was credited at roughly the retail rate. Under NEM 3.0, exports are credited at a much lower, wholesale-style value - down roughly 75% for many customers.

This is part of a national trend away from full retail net metering - see the general explainer on net metering.

Why it matters so much

Under old net metering, sending surplus power to the grid was almost as good as using it yourself. Under NEM 3.0, exported power is worth far less than the power you buy - so the value now comes from using your own solar directly rather than exporting it.

The market reacted fast:

  • California residential installations fell about 40% in 2024.
  • Battery attachment soared - from ~11% of new systems to over 50% - because storing daytime power to use at night beats exporting it cheaply.

Sources: Lawrence Berkeley National Laboratory; California Public Utilities Commission; industry reporting.

What it means if you’re going solar in California

  • A battery is often worth it now. Storing your surplus for evening use captures far more value than exporting under NEM 3.0. See do I need a solar battery.
  • Size around your own usage, not around maximum export. Oversizing to sell power back doesn’t pay like it used to - see how many panels you need.
  • Time-of-use matters. Exports are worth more during high-value evening hours, which also favors having storage.
  • Solar can still pay off - but the payback math is different, so run your own numbers (see is solar worth it).

Outside California?

NEM 3.0 is California-specific, but it’s the clearest example of a broader shift. Other states are revisiting net metering too - always check your own utility’s current export rules before deciding.

Bottom line

NEM 3.0 slashed the value of exported solar in California (~75%), pushing the economics toward self-consumption and batteries rather than exporting to the grid. If you’re going solar in CA, plan around using your own power - often with storage - and size accordingly.

Policy summary as of June 2026 - rules can change. Confirm current terms with the CPUC and your utility.

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