California solar now pays for the power you keep, not the power you make. Under NEM 3.0 the power you send to the grid earns only a few cents, so a typical home system takes about 11 years to pay for itself in our example. Under the old full-price credit it took about 5. How much you use at home decides where you land.
Typical payback under NEM 3.0About 11 years
NEM 3.0 vs the old creditAbout 5 to 11 years
Typical owned 6.70 kW California system at $19,095 cash (EcoGen Solar Cost Index, September 2026), no battery, on the Solar Billing Plan. Under the old full-price credit: about 5.4 years. Uses the EIA average price and our assumptions: 40% of the solar power used at home as it is made, a 6¢ credit for the 60% sent to the grid, and $201 a year in owner costs. See the math.
- Home use: solar power used as it is made saves the full price. Ask how the quote estimated your share.
- Export credit: an hourly price, often a few cents, fixed for 9 years. It belongs on the quote as its own number.
- Finish date: systems completed before January 1, 2027 are left out of your property tax assessment.
2026 rules: new home systems get no 30% federal homeowner credit (IRS). New PG&E, SCE and SDG&E solar customers who applied on or after April 15, 2023 are on the Solar Billing Plan, often called NEM 3.0, which pays an hourly price for exported power.
How we checked this guide
Export rules come from the PG&E net billing tariff, the state utilities commission and the SMUD and LADWP rate pages; the price of power from the U.S. Energy Information Administration; the example system from the EcoGen Solar Cost Index. Where we had to assume a number, the page says so.
The writer and checker shown above are EcoGen staff. EcoGen is paid when homeowners request quotes, which is explained beside the quote form. Read our editorial standards.
The question NEM 3.0 really asks you
Old California solar was simple: what the panels made, times the price you paid. Net billing split that value in two. A kWh (kilowatt-hour, the unit your bill counts) that you use as the panels make it saves the full price. A kWh you send to the grid earns an export credit: an hourly price, usually a small part of what you pay, fixed for 9 years from switch-on.
So the real question is how much of your solar power you can use yourself. Panels that export half their output fight the rules; panels feeding a midday air conditioner or car charger work with them. Read each row across.
When you use power
Worth a closer look
Someone is home in the day, or an air conditioner or electric car runs while the sun is up.
Pause and check
Most of your use comes after dark, so panels alone would export much of their output for a few cents.
Check next: your last 12 months of hourly use, from your utility.
The export credit in the quote
Worth a closer look
The quote shows the export credit as its own number and names your rate plan.
Pause and check
Every kWh is valued at the retail price: the old rule, closed after April 14, 2023.
Check next: the export credit per kWh and the plan name (Electric Home (E-ELEC), TOU-D-PRIME or EV-TOU-5).
Roof and timing
Worth a closer look
A roof with years of life left, and completion before January 1, 2027.
Pause and check
The roof needs replacing soon, or completion could slip past that date.
Check next: the roof’s age and a completion date written into the contract.
Price and battery
Worth a closer look
A cash price near the Index’s $19,095 for 6.70 kW ($2.85 per watt), with any battery priced on its own line.
Pause and check
One bundled price for panels and battery.
Check next: panel price, battery price and financed total.
Same panels, two export rules: the California math
Simple payback is the years your savings take to cover what you paid: net cost divided by yearly savings. Here is the typical California home system (6.70 kW, about 11,424 kWh a year) on today’s Solar Billing Plan, with no battery.
- Cash price
- $19,095
- Confirmed incentives
- $0
- Year-one production
- 11,424 kWh
- Used at home / exported
- 40% / 60%
- Average price (EIA, 12 months)
- $0.3299/kWh
- Export credit
- $0.06/kWh
- Owner-cost allowance
- $201/yr
- Used-at-home value
11,424 × 40% × $0.3299$1,508/yr - Export value
11,424 × 60% × $0.06$411/yr - Yearly savings after owner costs
$1,508 + $411 − $201$1,718/yr - Simple cash payback
$19,095 ÷ $1,718about 11.1 years
Inputs: the EcoGen Solar Cost Index typical California system (6.70 kW, $19,095 cash, September 2026; 1,705 kWh per kW a year). No rebate is subtracted: California has no general rebate for panels. The 32.99¢ EIA average includes fixed charges, and midday power on a time-of-use plan costs less than evening power, so the rate you really avoid is likely lower. Our assumptions: that 40% of the solar power is used at home as it is made and 60% is sent to the grid, owner costs of $201 a year ($30 per kW, including a reserve for a new inverter), and a 6¢ export credit. The 6¢ is based on PG&E: its 2026 hourly credits, weighted to the hours panels produce, come to about 5.21 cents per kWh, plus its 0.88 cents per kWh bonus for 2026 applications, about 6.09 cents. It is not an average of the three utilities. No battery.
Now change one thing: credit exports at about the full retail price, as the old net metering rule did. It closed to new applications after April 14, 2023, but it shows how much of the old payback came from exports.
| Scenario | Export credit | Export value | Yearly savings | Simple payback |
|---|---|---|---|---|
| NEM 3.0 today | $0.06/kWh | $411 | $1,718 | about 11.1 years |
| Old full credit | $0.3299/kWh | $2,261 | $3,568 | about 5.4 years |
The power used at home is worth the same in both rows. The whole gap comes from the 60% sent to the grid, so the more you use yourself, the closer you get to the old answer.
Try your own California usage
It starts with the Solar Billing Plan case. Change the share used at home, or enter your own quote, and press Calculate. Nothing you enter is sent anywhere.
Example result
about 11.1 years
simple cash payback
- Used-at-home value
- $1,508/yr
- Export value
- $411/yr
- Owner costs
- −$201/yr
- Yearly savings
- $1,718/yr
- Net cost
- $19,095
Starts with the Solar Billing Plan case above. Flat first-year values; rates, panel wear and repairs will change the result. No battery is included.
Why the solar power you keep is worth more
California homes paid an average of 32.99¢ per kWh from August 2025 to July 2026 (EIA). Solar power used at home avoids that price, or close to it; exports earn the hourly credit. SCE’s 2026 averages show the range: about 6 cents per kWh on summer days, 3 cents on winter days and 21 cents on summer evenings from 4 to 9 p.m., when panels make little.
Used at home: 4,570 kWh. Each one replaces power you would have bought, so it saves the full variable rate ($0.3299 here).
Sent to the grid: 6,854 kWh. These earn whatever your utility pays for exports ($0.06 here). That can be far less.
PG&E adds a small bonus per exported kWh for customers who start before 2028: 0.88 cents per kWh for 2026 applications. SCE’s credits vary by season and hour, so ask for the figure your quote uses. At the yearly true-up, kWh you sent out beyond your whole year’s use pay even less (PG&E: 2.74 cents per kWh in October 2026), and any dollar credit left carries into the next 12 months, so size the system to your own use.
Get quotes that model how you really use power
A California quote should start from your usage, not your roof. Ask for the home-use share and export credit it assumed.
Solar providers that serve your area may contact you, and they pay EcoGen for the introduction. How we make money.
A battery is a separate purchase
A battery moves midday solar power into the evening, when grid power costs most and exports pay little. Our example leaves it out. Judge it on its own: the evening price minus the export credit, times the kWh it moves in a year, against its price and warranty. PG&E pays $7,500 at addresses with repeated wildfire safety outages, until December 31, 2026, and SMUD pays $300 per kWh. Rules: our California incentives guide.
Owning, leasing or a PPA in California
The example assumes you own the system. With a lease or power purchase agreement (PPA), often sold with $0 down, the payback above does not apply: you pay the company instead.
| Option | Who owns the panels | Upfront | Ongoing | Check before signing |
|---|---|---|---|---|
| Cash | You | Full price | None to a lender. A smaller utility bill. | The export credit and rate plan the estimate uses. |
| Loan | You | Often $0 | Loan payment, plus your remaining utility bill. | Cash vs financed price. A dealer fee raises the real price and stretches the payback. |
| Lease | Solar company | Often $0 | Monthly lease payment, plus your remaining utility bill. | The yearly escalator and sale rules. LADWP allows leases only for terms of at least 10 years. |
| PPA | Solar company | Often $0 | A price per kWh for the power the panels make. | Compare the PPA rate with the rate you avoid. LADWP does not allow PPAs. |
Loan terms: see our solar financing guide. A system completed before January 1, 2027 is left out of your property tax assessment whether you own or lease it.
Six things a California solar quote has to show
Get two or three quotes. One blended rate with no export number is an average, not a model of your home.
- Your rate plan by name. The time-of-use plan the savings model uses.
- Export credit as its own number. What exported power earns, apart from the retail price.
- Home-use share. Built from your own hourly usage, not a default.
- The battery on its own line. Its price and what it adds to yearly savings.
- Cash and financed prices. Both totals side by side, with any dealer fee shown.
- Completion date in writing. Before January 1, 2027 if you want the property tax exclusion.
Compare California solar quotes
Ask each installer to name your rate plan and show the export credit as its own line. Enter your ZIP code to request quotes from solar providers that serve your area.
How EcoGen is paid
EcoGen America does not sell or install solar. When you request quotes, we pass your request to solar providers serving your area, and they pay us for the introduction. Providers can include installers, solar marketplaces and lead exchanges, and more than one may contact you. You never pay us. This is not an application to your utility’s Solar Billing Plan.
More California solar guides
- California solar guide: utilities, incentives and installers in one place
- California solar companies: compare local installers before you request quotes
- California solar incentives: what is left, by utility
- What solar costs in California
- Free solar panels in California: real programs vs $0-down offers
- Are solar panels worth it? The national guide and payback calculator
All 51 state guides
California solar questions, answered
Is solar worth it in California in 2026?
It can be, if you use much of the power at home. In our example a typical owned system pays back in about 11 years under the Solar Billing Plan. Retail power averages 32.99¢ per kWh, so each kWh you use yourself is valuable. Exports earn far less.
Are solar panels worth it in California without net metering?
California still pays for exported power, just less. Since April 15, 2023, new PG&E, SCE and SDG&E systems earn an hourly export price, usually far below what you pay. Systems sized to your own use hold up; systems that mostly export struggle.
Is a solar battery worth it in California?
Often worth a look, because a battery stores cheap midday power for expensive evenings. Judge it as its own purchase: its price against the extra savings. Some homes get help, such as PG&E’s $7,500 rebate for outage-prone addresses or SMUD’s $300 per kWh incentive.
What happened to the 30% federal solar credit?
The federal homeowner credit does not apply to systems placed in service after December 31, 2025, and California has no state tax credit for home solar. That is why our example subtracts no rebate. If a quote for a system you buy still takes 30% off, ask for a new one.
Does NEM 3.0 apply to LADWP or SMUD customers?
No. The Solar Billing Plan covers PG&E, SCE and SDG&E. LADWP is a city utility with its own net metering rider, and SMUD buys extra power at 9.6 cents per kWh at any hour. Model those homes on their own utility’s rules and prices.
How do I know if a California solar quote is complete?
It names your rate plan, shows the export credit apart from the retail price, builds the home-use share from your hourly usage, lists any battery on its own line, and shows the cash price beside the financed total. If something is missing, ask why.
Sources, method and corrections
The example uses the EcoGen Solar Cost Index typical California system (September 2026). Three inputs are our assumptions: 40% of the solar power is used at home as it is made and 60% is sent to the grid, exports earn a 6¢ credit based on PG&E’s 2026 hourly credits, and owner costs are $201 a year ($30 per kW, including a reserve for a new inverter). The 40/60 split is a planning assumption based on home-use research, not a measured California average. The old net metering case credits exports at the EIA average price. Simple payback uses flat first-year values. The calculator runs in your browser and sends nothing.
Updated October 2026: 40% home use and 60% exports, owner costs of $30 per kW a year, the basis of the 6¢ export credit, and no SCE bonus figure we could not confirm.
Spotted an error? Tell us through our corrections and feedback process.
- CPUC: Net energy metering and net billing (Solar Billing Plan start date, legacy net metering terms)
- PG&E: Electric Schedule NBT (9-year lock, bonus credit table, required rate plan; checked September 30, 2026)
- SMUD: Solar and Storage Rate (9.6¢ export price since June 1, 2026)
- LADWP: Residential rates and Service Rider NEM (city net metering rider and lease rules)
- California Board of Equalization: Active solar energy system exclusion (property tax exclusion)
- U.S. EIA: average residential electricity price by state (12-month average, August 2025 to July 2026, as used in the Cost Index)
- IRS: Residential Clean Energy Credit (no credit for property placed in service after December 31, 2025)
- EcoGen Solar Cost Index, September 2026: what solar costs in California (typical system size, price, production and electricity price)
