Net Metering vs Net Billing

Overview

A solar array produces most of its energy around midday, when a household is often empty and the grid is already saturated with solar. What happens to those surplus kWh is governed by your utility's export rule, and in 2026 that rule can be worth more than the hardware price. Full-retail net metering values an exported kWh at the same rate you pay to buy one. Net billing values it at an avoided-cost rate derived from wholesale conditions — sometimes a tenth of retail. This guide explains the mechanics, the California precedent, and how to obtain the number you actually need.

Two ways to value a kWh

Under 1:1 net metering, the meter effectively runs backward and banked credits offset later consumption at the retail rate. Under net billing, imported and exported energy are priced separately: you pay retail for what you take, and receive an avoided-cost credit for what you send. The retail rate in August 2026 ranged from 12.72 ¢/kWh in Nevada to 47.18 ¢ in Hawaii (EIA Table 5.6.A), while California's NEM 3.0 export credits averaged about 3.7–4.6 ¢ for 2025–2026 applicants. That spread — not the panel brand — decides the bill.

California's Net Billing Tariff

The CPUC adopted the Net Billing Tariff in December 2022 and applied it to new PG&E, SCE and SDG&E interconnection applications from April 2023. Export credits come from the Avoided Cost Calculator and vary by hour, month and weekday. Published averages for 2025–2026 applicants are 3.9 ¢ (PG&E), 4.6 ¢ (SCE) and 3.7 ¢ (SDG&E), with rates locked for nine years by application vintage. Legal challenges ended in 2026: the Court of Appeal upheld the tariff in March and the California Supreme Court declined review in June. Municipal utilities such as LADWP follow different rules.

Why self-consumption became the whole game

If a kWh used on site avoids a 30 ¢ purchase while an exported kWh earns 4 ¢, the difference is 26 ¢. A battery, a heat-pump water heater timed to midday, an EV charged at home during the day, or simply a household that is home at noon all move kWh into the higher-value bucket. This is why two California homes with identical arrays can see very different paybacks. HelioCalc models a default 45% self-consumption share under net billing and raises it with battery capacity — but the real number comes from your interval data.

How to get your actual export rate

Ask your utility for the current export compensation rate in cents per kWh, whether it is locked and for how long, whether there is an annual true-up cap, and which non-bypassable charges cannot be offset. For California, ask which Avoided Cost Calculator vintage applies. If a proposal only says "net metering available," it has not answered the question.

States we could and could not verify

Our November 2026 review confirmed full-retail-style crediting for Florida, Illinois, Massachusetts, New Jersey and New York (subject to caps and program phases), and reduced-export net billing for Arizona, California, Georgia, Nevada, North Carolina and Utah. Many other states leave the terms to individual utilities — Texas is the clearest example, with no statewide mandate. Where we could not verify a rule, HelioCalc defaults to a conservative 5 ¢/kWh and tells you to confirm. We would rather understate than invent.

Key figures worth keeping

• 3.9 / 4.6 / 3.7 cents per kWh — published average NEM 3.0 export credits for PG&E, SCE and SDG&E 2025–2026 applicants.
• Nine years — the period for which a California export-rate vintage is locked.
• 12.72 cents — Nevada's August 2026 residential rate, the lowest in the EIA series.
• 47.18 cents — Hawaii's August 2026 residential rate, the highest in the series.
• 45% — HelioCalc's default self-consumption share under net billing, before any battery.

How this shows up in a real estimate

The practical test is a single multiplication. Take the kWh you would export in a year and multiply it by the difference between your retail rate and your export credit. On 6,000 exported kWh with a 26-cent gap, that is about $1,560 a year — enough to move payback by several years on a mid-priced system. That arithmetic is why the export rate deserves more scrutiny than the panel warranty. It is also why a battery can be valuable in one state and a purely resilience purchase in the neighbouring one, with identical hardware on both roofs.

Checklist before you decide

• Obtain the export rate in cents per kWh, not as a percentage of retail.
• Ask whether the rate is locked, and for how long.
• Ask about an annual true-up cap on banked credits.
• Identify non-bypassable charges that credits cannot offset.
• Request a bill-impact analysis built on your interval data.