California’s Net Billing Tariff (NEM 3.0): a homeowner survival guide
California changed the economics of new rooftop solar for customers of the large investor-owned utilities when the Net Billing Tariff took effect for qualifying interconnection applications submitted on or after April 15, 2023. The key change is not that rooftop solar stopped working; it is that exported electricity is generally credited differently from electricity consumed behind the meter.
What NEM 3.0 actually changed
Under the Net Billing Tariff, excess generation exported to the grid earns time-varying Energy Export Credits based on the value of that electricity to the grid. Those credits are often lower than retail rates, although values vary by hour and season. That makes self-consumption—the solar electricity your home uses directly—more important than under older net-metering structures.
Start with your real utility and usage
Before sizing panels or storage, confirm the electric utility on the account, review recent kWh usage and identify likely future loads such as an EV, heat pump, pool equipment or ADU.
Open Home Solar Simplified →Why batteries matter more now
A battery is not legally required simply because a home is on the Net Billing Tariff. However, storage can increase the share of solar energy used at home and shift energy into higher-value evening hours. The CPUC notes that customers can maximize bill savings under the NBT by pairing generation with battery storage, but the right answer still depends on battery cost, load shape, rate plan, backup goals and system design.
Time-of-use changes the math
For SCE Solar Billing Plan customers, grid prices and export values vary by time. SCE states that Solar Billing Plan customers use TOU-D-PRIME, with rates often higher on summer weekdays from 4–9 p.m. A useful proposal should therefore show hourly or interval-aware assumptions rather than only annual solar production.
Connected-home note
Solar and battery monitoring apps use internet connectivity for dashboards, alerts and remote controls. The solar array itself should not be sold on the premise that broadband is required for basic energy production.
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