NEM 3.0 Calculator California Solar + Battery
Under California's Net Billing Tariff (NEM 3.0), exports pay only a fraction of retail — so a solar-only system barely saves. This shows the real decision: solar-only vs solar + battery, and why the battery that shifts power into the 4–9 PM peak usually wins.
1 Your usage & rates
Sets representative peak and off-peak rates. SDG&E has the widest peak/off-peak spread (best battery economics); LADWP/SMUD municipal customers aren't on NEM 3.0. Edit rates to match your bill.
NEM 3.0 exports average ~5–8¢/kWh (vs ~30¢ retail). This is why exporting surplus is now worth so little.
2 System
3 Battery
e.g. a Tesla Powerwall or Enphase IQ ≈ 13.5 kWh usable. Cycled daily into the peak window.
SGIP general-market rebates are modest; equity & resiliency tiers (income-qualified or high fire-risk areas) can reach ~$1,000/kWh. Check your eligibility and enter it here.
Indicative estimates only. NEM 3.0 export rates vary by the hour, day and month (CPUC Avoided Cost Calculator); this uses a daily-average approximation. Battery savings depend on your real peak/off-peak spread and how fully you cycle it. The federal residential tax credit ended for owned systems after 2025 — not applied here by default. Verify rates and SGIP eligibility before purchasing.
How this is calculated
Adding a battery: instead of exporting midday surplus at ~7¢, you store it and discharge it during the 4–9 PM peak, avoiding grid power at ~40–55¢. The battery's extra value ≈ energy cycled daily × (peak rate − export rate). That spread is the whole point — and it's why, under NEM 3.0, solar + battery often pays back faster than solar alone despite the higher cost.
Net cost = solar + battery − any SGIP/rebate (federal residential credit not applied for owned 2026 systems). Payback = net cost ÷ annual savings. Real NEM 3.0 export rates change every hour via the CPUC Avoided Cost Calculator; this is a daily-average estimate — verify with your utility.
NEM 3.0 explained: California's net billing
California's switch to NEM 3.0 (the Net Billing Tariff) in April 2023 fundamentally changed the maths of home solar in the state — and it's why a solar-only system that made obvious sense under the old rules now needs careful thought. Under the previous net metering, exported solar earned close to the full retail rate. Under NEM 3.0, exports are paid the "avoided cost" rate, which averages only around a quarter of retail. That single change shifts the whole economics from "export everything" to "use and store as much as you can yourself" — which is what this calculator helps you model.
The rates and rules here are dated references for 2026; export values vary hour by hour and by utility, so confirm current figures with your utility before deciding.
What actually changed
The core change is the value of exported electricity. Where NEM 2.0 credited exports at nearly the retail rate (around 30–35¢/kWh), NEM 3.0 credits them at avoided-cost rates that average roughly 5–8¢/kWh — a cut of about 75%. Those export rates also vary by the hour and season, spiking only during a few high-demand evening hours. The practical effect: sending surplus solar to the grid at midday now earns very little, while buying it back in the evening still costs the full retail rate. That gap is the problem a battery solves.
Why batteries now make the difference
Under NEM 3.0, a battery changes the economics by letting you store your cheap midday surplus instead of exporting it for a few cents, then use it (or export it) during the expensive 4–9 PM peak when grid power can cost 40–55¢/kWh. The value a battery captures is roughly the energy it cycles times the gap between the peak rate and the export rate. Because that gap is now large, the counterintuitive result is that solar-plus-battery often pays back faster than solar-only under NEM 3.0 — the battery unlocks value the tariff otherwise destroys. This calculator compares the two paths directly so you can see which wins for your rates and usage.
When a battery doesn't pay
Honesty cuts both ways: a battery isn't always the answer. If your peak-to-export spread is small (some utilities and rate plans), or you already self-consume most of your solar during the day, the extra cost of a battery may not shorten payback — it just adds backup capability. The calculator reflects this by flipping its recommendation to "solar only" when the spread is too small to justify storage. That's the difference between an honest tool and an installer's pitch that always recommends the upsell.
SGIP and grandfathering
California's SGIP program offers battery rebates — modest for most homes, but substantial (up to around $1,000/kWh) for income-qualified households or those in high-fire-risk areas, which can transform the battery economics if you qualify. Separately, homes that installed under NEM 2.0 before the cutoff retain those better terms for a grandfathering period, and municipal-utility customers (such as LADWP and SMUD) aren't on NEM 3.0 at all. Check which regime actually applies to you before assuming NEM 3.0 rates.
Frequently asked questions
It's California's Net Billing Tariff, in effect since April 2023, which pays solar exports at avoided-cost rates (around 5–8¢/kWh average) instead of near-retail. This roughly 75% cut to export value is why self-consumption and batteries now drive California solar economics.
Yes, but the best configuration changed. Solar-only saves less than before because exports earn little. Pairing solar with a battery — to use your own power in the expensive evening peak — restores strong returns and often pays back faster than solar-only. Run both through the calculator.
Usually it helps significantly, because it captures the large gap between peak grid rates and low export rates. But if your peak-to-export spread is small or you already use most of your solar by day, a battery may not shorten payback. The calculator shows when it does and doesn't pay.
Systems interconnected before the April 2023 cutoff are generally grandfathered on NEM 2.0 for a period; newer systems are on NEM 3.0. Customers of municipal utilities like LADWP and SMUD aren't on NEM 3.0 at all. Confirm with your specific utility, as it changes the numbers substantially.