Sunprint
At a glance
"NEM 3.0" is the common name for the net billing tariff the CPUC adopted in December 2022. The big change is the price of power you send to the grid. NEM 2.0 credits it at the same retail price you'd pay for power at that hour; net billing credits it at values from the CPUC's Avoided Cost Calculator, which the CPUC says are usually lower than the retail rate but can rise above it on late summer evenings.
For homes going solar now there's no choice: net metering is closed to new customers. The comparison matters if you already have NEM 2.0, are buying a home that has it, or want to know why solar math changed.
NEM 2.0 and NEM 3.0 side by side
| NEM 2.0 | NEM 3.0 (net billing) | |
|---|---|---|
| Who it covers | Homes that applied to connect before April 15, 2023 | Homes that applied on or after April 15, 2023, and NEM homes whose 20 years ran out |
| Solar you use at home | Saves the retail price | Saves the retail price |
| Power sent to the grid | Credited at the retail price for that hour | Hourly export credits from the CPUC's avoided-cost values, usually far lower |
| Rate plan | A time-of-use plan | A required electrification plan: E-ELEC, TOU-D-PRIME or EV-TOU-5 |
| Paying the bill | Energy charges settle once a year at true-up | Every month |
| How long it lasts | 20 years from when the system was connected | Export prices locked 9 years for the first customer |
| Bonus credit | None | At PG&E and SCE, for homes applying through 2027 |
For PG&E, SCE and SDG&E homes. Sources: CPUC net metering and net billing page; utility Solar Billing Plan pages.
One kWh, two prices
Here's what a single kWh sent to the grid earns at PG&E under each plan, at three moments:
At midday, when panels send out the most, the gap is huge: about 40 cents against 5 in July, and 37 cents against less than half a cent on an April afternoon. On summer evenings net billing pays much more, which is why it rewards batteries that hold midday solar until then.
What it means for a home
Under net billing, what a home uses itself matters most. In our model of homes at PG&E, SCE and SDG&E with systems sized to 85% of their yearly use, about 41 to 43% of the solar gets used at home and saves the full retail price. The rest goes to the grid and earns on average 3.5 to 6.2 cents per kWh, against roughly 34 to 46 cents for power bought from the utility. Under NEM 2.0, nearly every kWh was worth close to the retail price, so it hardly mattered when you used it.
Batteries are now common with new systems: in California DG Stats, about seven in ten new PG&E and SCE solar homes approved from January to August 2026 included one. Our payback guide runs the numbers.
Keeping NEM 2.0: 20 years, selling and adding panels
- 20 years from connection. Under the CPUC's rules, NEM 2.0 lasts 20 years from when the system was connected. When it ends, the account moves to the Solar Billing Plan, SDG&E says. Homes that move over this way don't get the nine-year export price lock new net billing customers get.
- Selling your home. The 20 years go with the system, not the owner. SDG&E says that for a home bought with solar, the period started when the panels were first connected, and PG&E's Solar Billing Plan page says the 20-year rules are tied to the system, not the owner.
- Adding panels. PG&E says a legacy NEM system that's expanded above its tariff limits, an increase of 10% of the original capacity or more than 1 kW, moves to the Solar Billing Plan at its next true-up. Check with your utility before adding.
- No second 20 years. PG&E says NEM 1.0 customers who moved to NEM 2.0 when their legacy period ended don't get another 20 years.
What a free quote call gets you
- One verified local installer
- The installed price for your roof
- Your payback years from that price
- Free, with no obligation
See what solar could save you
About a minute, and no phone number needed. If the number looks good, a free quote call gets you the exact price.
Common questions
What is the difference between NEM 2.0 and NEM 3.0?
NEM 2.0 credits solar sent to the grid at the retail price for that hour. NEM 3.0, the net billing tariff for homes that applied from April 15, 2023, credits it at hourly export values from the CPUC's Avoided Cost Calculator, usually much lower. It also requires an electrification rate plan and monthly bills.
How long does NEM 2.0 last?
20 years from when the system was connected to the grid. After that, the account moves to the Solar Billing Plan, without the nine-year export price lock new customers get.
Can I keep NEM 2.0 if I sell my house?
The buyer keeps it for whatever is left of the 20 years. PG&E says legacy status is tied to the system, not the owner, and SDG&E says the period starts when the panels were first connected.
Can I still sign up for NEM 2.0?
No. The CPUC says net metering tariffs are closed to new enrollments; homes that applied to connect on or after April 15, 2023 are on net billing.
Will adding panels move me off NEM 2.0?
It can. PG&E says a legacy system expanded by 10% of its original capacity or by more than 1 kW moves to the Solar Billing Plan at its next true-up. Check with your utility before adding.
Related guides
- California solar calculator
- NEM 3.0 in California, explained
- Your solar true-up bill
- Solar batteries in California
- Is solar worth it in California?
- Solar for PG&E customers
Rates and export credits change; the figures here are for 2026. Model figures are estimates for typical homes, not a quote for yours. Sources: CPUC: net metering and net billing · PG&E E-TOU-C rates · PG&E: Solar Billing Plan · PG&E: solar bill · SDG&E: Solar Billing Plan · California DG Stats. Reviewed October 2026.
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