NEM 3.0 vs NEM 2.0: Which Saves More in 2026?

If you installed solar after April 15, 2023, you've probably had this moment: you see a neighbor crow about their near-zero electricity bill, ask how, and find out they're on NEM 2.0. Then you look at your own true-up statement and feel the gut punch.

NEM 3.0 — California's current net energy metering program — is a fundamentally different deal than what solar customers got for the decade before it. The savings are still real, but they require a different strategy entirely. Here's an honest breakdown of what changed and what you need to do about it.

---

What Is NEM 2.0 (and Why People Still Love It)?

Net Energy Metering (NEM) lets solar customers export excess electricity to the grid and receive credits on their bill. Under NEM 2.0, those credits were priced at near-retail rates — around $0.28–$0.35/kWh depending on the time of day.

That's powerful. A 7kW system on a south-facing roof in Sacramento could easily generate $1,800–$2,400/year in credits, erasing most or all of a household's electricity bill.

NEM 2.0 customers who enrolled before April 2023 are grandfathered for 20 years from their enrollment date. If you're one of them, protect that status like your life depends on it — don't move, don't significantly expand your system without checking the rules first.

---

What NEM 3.0 Actually Changed

The California Public Utilities Commission (CPUC) redesigned the program from the ground up. The core change: export credits dropped to roughly $0.04–$0.08/kWh, depending on the hour and season.

That's not a rounding error. That's an 83% reduction in what the grid pays you for the electricity your panels produce.

The reasoning from the CPUC: reduce the "cost shift" to non-solar ratepayers, and incentivize battery storage over direct grid export. Whether you agree with the policy or not, the math is brutal for anyone who went solar expecting NEM 2.0 economics.

The result: NEM 3.0 customers report 50–100% higher electricity bills than they projected at the time of installation, particularly those who sized their systems for NEM 2.0 export economics. For many homeowners, it genuinely feels like the program is working against them.

---

The Dollar Impact: A Real Comparison

	NEM 2.0	NEM 3.0
Export credit rate	~$0.30/kWh	~$0.05/kWh
Annual export value (7kW system)	$1,600–$2,200	$270–$370
Battery payback pressure	Low (grid pays well)	High (must self-consume)
Optimal rate plan	E-1 or E-TOU-C	E-ELEC or EV2-A
10-year net savings vs. no solar	$15,000–$22,000	$4,000–$9,000

The savings gap is real. But NEM 3.0 isn't a disaster — it's a different playbook.

---

How to Actually Save Money on NEM 3.0

The core principle flips completely: don't export, self-consume. Every kilowatt your panels produce that you use directly is worth retail rate (~$0.35/kWh). Every kilowatt you push to the grid earns ~$0.05/kWh. That's a 7x difference.

1. Shift Consumption to Peak Production Hours

Run your dishwasher, do laundry, pre-cool your house — all between 10 AM and 3 PM. These are the hours your panels are generating the most power and you'd otherwise be exporting cheaply.

A household that aggressively time-shifts can recover $400–$700/year in NEM 3.0 savings just by changing when they run high-wattage appliances.

2. Get on the Right Rate Plan — This Is Non-Negotiable

Under NEM 3.0, your rate plan matters more than it ever did under NEM 2.0. The E-ELEC rate plan was specifically designed for solar + storage customers. It offers aggressive off-peak pricing (as low as $0.08/kWh overnight) paired with high on-peak rates that make battery dispatch valuable.

EV2-A is excellent if you have an electric vehicle — the overnight charging discount offsets a lot of the daytime export penalty.

Many NEM 3.0 customers are still on E-TOU-C or even E-1 by default. That's leaving real money on the table.

3. Battery Storage Changes the Calculus

Under NEM 2.0, batteries were nice-to-have — the grid was already paying you well. Under NEM 3.0, a battery effectively turns you into your own utility.

Store solar production during the day. Dispatch it during peak hours (4–9 PM) when grid electricity costs $0.45–$0.55/kWh. The spread between what you store (essentially free solar) and what you avoid paying (peak-rate grid power) is where NEM 3.0 battery ROI comes from.

A 10kWh battery paired with proper NEM 3.0 rate optimization can deliver $900–$1,400/year in bill reductions in California's climate, with payback periods under 8 years in many scenarios.

---

The One Thing Most NEM 3.0 Customers Get Wrong

They stay on the wrong rate plan.

NEM 3.0's new Avoided Cost Calculator (ACC) export rates vary by hour of day and season. Paired with the wrong rate plan, your solar system is fighting uphill. Paired with the right one, the economics look a lot better than the average NEM 3.0 headline suggests.

This is also where billing errors hide. PG&E sometimes auto-enrolls new solar customers on plans that were designed for non-solar households. The error can persist for 12 months until the annual true-up — and by then, you've overpaid by hundreds of dollars with no easy way to recoup it.

---

The Bottom Line

NEM 2.0 customers save more, automatically, without thinking about it. That window closed in April 2023.

But NEM 3.0 customers who are on the right rate plan, time-shifting consumption, and storing solar energy can still build a real savings case. The difference is that NEM 3.0 rewards optimization — and punishes people who just set-and-forget.

The first step is knowing whether you're on the right rate plan right now.

Upload your PG&E bill — we'll tell you if you're on the optimal NEM 3.0 rate plan →