Net Metering in California (2026)
California uses Net billing. California's NEM 3.0 (net billing) pays export credits based on hourly avoided-cost values roughly 75% below retail, making batteries essential to capture solar value.
| Policy type | Net billing |
|---|---|
| Export compensation | Below-retail export credit set by tariff |
| Retail electricity rate | ~33¢/kWh |
| Est. annual production per kW | ~1,550 kWh/kW/yr |
Policy status reflects the statewide standard as of 2026. Actual export rates and program caps vary by utility — confirm with your provider.
What this means for your payback
Since California pays less than retail for exports, self-consumption is where the money is. Every kWh you use in your home is worth the full ~33¢/kWh, while exported kWh earn less — so a home battery that shifts midday production into evening use materially improves payback here, unlike in full retail net-metering states.
2026 reality check: the 30% federal tax credit for purchased home solar ended Dec 31, 2025. With that gone, net metering policy and any California state incentives are now the main levers on your solar ROI. Run the numbers on your actual utility bill before signing anything.
See full solar costs & payback for California
Solar panel cost in California →California net metering FAQ
Does California have net metering?
Not in the traditional 1:1 sense. California uses net billing, crediting exported solar below the retail rate. California's NEM 3.0 (net billing) pays export credits based on hourly avoided-cost values roughly 75% below retail, making batteries essential to capture solar value.
What is California's solar export rate?
Below retail. California's NEM 3.0 (net billing) pays export credits based on hourly avoided-cost values roughly 75% below retail, making batteries essential to capture solar value. As a rule, plan your system around using power on-site rather than banking exports at 33¢/kWh.
Do I need a battery to make solar worth it in California?
A battery helps a lot here. Because California pays less than retail for exports, storing midday solar and using it at night captures far more value than exporting it, shortening payback.
Is solar still worth it in California now that the federal tax credit is gone?
Often, yes. The 30% federal credit for purchased systems ended Dec 31, 2025, so California's net billing plus any state incentives are now the main drivers of payback. At ~33¢/kWh and about 1,550 kWh produced per kW each year, run the numbers on your own bill before deciding.