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NEM 3.0 solar savings calculator

Yearly savings and payback in California under the Net Billing Tariff.

kW
USD/W
¢/kWh
¢/kWh
%
Yearly production
11,756 kWh
Sent to the grid
7,053 kWh
Export credits per year
$352.67
Savings if every kWh earned your full rate (old NEM)
$5,290.11
Simple payback
11.3 years
Yearly savings under NEM 3.0
$2,468.72

Estimate only. Your utility's time-of-use rate, when you use electricity and the export values locked in for your system change the real savings.

What NEM 3.0 changed

California customers of PG&E, SCE and SDG&E who applied to connect solar on or after April 15, 2023 take service on the Net Billing Tariff, commonly called NEM 3.0 (CPUC). Under the old net metering, each kWh sent to the grid earned about the same as a kWh bought. Under net billing, exports earn a credit based on their value to the grid, set by the CPUC's Avoided Cost Calculator.

The difference is large. The CPUC reports that net metering credits exports at about $0.45 per kWh, while the 2024 Avoided Cost Calculator values that energy at about $0.05 per kWh, averaged over all hours (CPUC, 2025 SB 695 Report).

How the savings are calculated

  1. Yearly production: system size × what 1 kW of panels produces in a year in California (PVWatts).
  2. Used at home: the share of that solar you use while the panels produce. Each of those kWh saves your full rate.
  3. Sent to the grid: the rest, which earns the export credit.
  4. Simple payback: system cost ÷ yearly savings.

Default values

  • Your rate: 45¢ per kWh, the CPUC's rounded average of the PG&E E-TOU-C (50¢), SCE TOU-D-4-9 (37¢) and SDG&E TOU-DR1 (47¢) off-peak rates above baseline in effect on March 1, 2025. Use the rate on your bill.
  • Export credit: 5¢ per kWh, the CPUC's rounded average export value. Real credits change by hour and month and are higher in the early evening.
  • Used at home: 40% is only a starting point. Raise it if you run appliances, an EV charger or a heat pump during the day.

How to save more under NEM 3.0

Use more of your solar at home: run the dishwasher, laundry, pool pump or EV charging in the middle of the day. A home battery stores midday solar for the evening, when your rate is highest; see the battery backup calculator. The calculator does not include fixed monthly charges, the yearly true-up for surplus energy or the federal tax credit, which does not apply to systems placed in service after December 31, 2025.

Frequently asked questions

Is solar still worth it in California under NEM 3.0?

It can be, but payback depends on how much solar you use at home. With the default values, a 7 kW system at $4.00/W pays back in about 11 years using 40% at home and about 7 years using 70%.

How much does NEM 3.0 pay for exported solar?

It depends on the hour and month. The CPUC reports an average value of about $0.05 per kWh across all hours in its 2024 Avoided Cost Calculator.

Who is on NEM 3.0?

Customers of PG&E, SCE and SDG&E who applied to connect solar on or after April 15, 2023.