Question 1

What is net metering?

Accepted Answer

Net metering is a billing mechanism where solar panel owners get credit on their electric bill for excess solar electricity sent to the grid. Under traditional net metering (NEM 1.0/2.0), customers received full retail rate (~$0.13-0.30/kWh depending on state) for exports — basically reversing the meter dollar-for-dollar. Newer policies (California NEM 3.0, Arizona Export Compensation, NY VDER) compensate at lower wholesale-tier rates while charging retail for grid imports — making batteries economically necessary to capture full value.

Question 2

What is California NEM 3.0?

Accepted Answer

NEM 3.0 (officially "Net Billing Tariff") replaced NEM 2.0 for California solar applications submitted after April 14, 2023. Key changes: (1) Export compensation reduced ~75% (from full retail ~$0.30/kWh to ~$0.05-0.08/kWh based on time-of-day "avoided cost" rates); (2) Time-of-export matters — peak hours pay more; (3) 9 USD/month grid participation charge; (4) Solar-only payback extended from 4-5 years to 8-9 years; (5) Solar+battery payback 6-9 years; battery enables you to use solar at peak retail rates rather than exporting at low wholesale rates.

Question 3

Which states have the best net metering for solar?

Accepted Answer

Top states for solar economics in 2026: (1) New Jersey — SuSI program with SREC-II at $90/MWh + retail credit, payback 5-8 years; (2) Massachusetts — SMART program with 20-yr contract, payback 5-9 years; (3) Florida — full retail net metering, payback 6-9 years; (4) Connecticut — full retail credit + state rebates; (5) Maryland — SREC + full retail. Worst: California (NEM 3.0 reduced rates), Texas (no statewide policy), Arizona (export compensation rate ~30% below retail).

Question 4

What is virtual net metering?

Accepted Answer

Virtual Net Metering (VNM) lets solar credits flow to a different meter than where the panels are physically located. Use cases: (1) renters whose landlord installs solar but the renters benefit; (2) multi-unit buildings with single-shared rooftop array distributing credits; (3) community solar — subscribers buy shares of off-site solar farm and receive bill credits as if panels were at their home. Available in CA, NY, MA, IL, MN, CO + 15 other states. Critical for the 30%+ of US population that rents.

Question 5

What is aggregation in net metering?

Accepted Answer

Aggregation lets a single owner combine multiple meters under one net metering account. Use cases: (1) farms with house meter + barn meter + irrigation pump meter; (2) businesses with multiple buildings; (3) homeowners with separate workshop or ADU on same property. Without aggregation, each meter calculates net separately — excess at one meter is wasted while another meter pays full retail. Allowed in: CA, NY, MA, NJ, MD, MN, OR, VT, others. Each state has specific rules about distance, common ownership, etc.

Question 6

How does battery storage interact with net metering?

Accepted Answer

In states with full retail NEM (FL, NJ, MA), battery is OPTIONAL — exports earn the same as imports, so simply staying connected to grid is fine. In states with reduced export rates (CA NEM 3.0, AZ, NV), battery becomes ESSENTIAL — store solar during day, use at night to avoid expensive grid imports. NEM 3.0 California specifically: solar-only payback 8-9 years, solar+battery 6-9 years (battery PAYS BACK ITSELF via avoided imports). Federal Section 25D 30% tax credit applies to both solar AND battery.

Question 7

Can my net metering credits expire?

Accepted Answer

Most states have an annual "true-up" period (typically March-April or April-May). Excess credits accumulated during high-production months are reconciled annually: (1) Some states roll over indefinitely; (2) Others pay out at avoided-cost wholesale rate (~30% of retail) at year-end; (3) NEM 3.0 California: monthly true-up at avoided cost; (4) Some states zero out credits and forfeit. Best practice: size your solar system to roughly match annual consumption — oversized systems donate excess to utility at low rates.

Question 8

What happens to net metering when I sell my house?

Accepted Answer

Most NEM contracts are tied to the property, not the customer — they transfer to the new owner when the home sells. CA NEM 2.0 grandfathered status (full retail credit) continues for the new owner through the original 20-year term. Net metering rights typically add $5,000-$30,000 to home sale price for grandfathered systems (depending on remaining term). New owner inherits the net metering rate the system was originally enrolled at — buying a NEM 2.0 California home gives 14-20 years of remaining grandfathered rates as a hidden value.

State	Policy	Export Rate	Cap	Solar Payback
California	NEM 3.0 (Net Billing Tariff)	~$0.05-0.08/kWh (75% lower than NEM 2.0)	No cap, but battery strongly incentivized	Solar-only payback extended 4→8 years; solar+battery 6-9 years
Hawaii	Customer Self-Supply / CGS Plus (capped)	~$0.10/kWh (60% retail)	Capped per utility; new applications limited	Solar+battery payback 8-12 yr
Texas	No statewide net metering	Varies by utility (Austin Energy, CPS, others)	Utility-specific	Solar payback 8-12 yr depending on plan
Florida	Full retail net metering	~$0.13/kWh (full retail)	No cap	Solar payback 6-9 yr
New York	Value Stack (VDER)	~$0.08-0.13/kWh (location/time-of-day variable)	No cap	Solar payback 6-10 yr
New Jersey	Successor Solar Incentive (SuSI)	SREC-II $90/MWh + retail credit for self-consumed	No cap on installations; SREC-II program annual cap	Solar payback 5-8 yr (one of the best)
Massachusetts	SMART program + net metering	Tiered by capacity, ~$0.10-0.18/kWh	Project size + utility cap	Solar payback 5-9 yr
Arizona	Export Compensation Rate (NEM phased out 2017)	~$0.07-0.09/kWh	No cap	Solar payback 8-12 yr
Nevada	Reduced NEM (75% retail credit)	~$0.08-0.10/kWh	50% utility cap reached → reduced rate	Solar payback 9-13 yr
Colorado	Full retail net metering	~$0.11/kWh	No statewide cap; utility-specific	Solar payback 6-10 yr

Net Metering Policy by State 2026 — Solar Buyback Rates & Payback Math

10 states — net metering policy comparison

California NEM 3.0 — what changed and why batteries matter

Virtual Net Metering — for renters + community solar

Annual true-up — what happens to excess credits

Related Jouleio resources