Compare California net metering versions side-by-side. Calculate annual export benefits under NEM 1.0, NEM 2.0, and NEM 3.0 ACC-based rates. See the impact of battery storage and grandfathering deadlines on your solar investment.
California's net metering policy has gone through three major revisions, each fundamentally changing the economics of solar. Under NEM 1.0 and NEM 2.0, solar customers received full retail rate credit for every kWh exported to the grid. Under NEM 3.0 (officially called Net Billing Tariff or NBT), export credits are based on Avoided Cost Calculator (ACC) rates, which are typically $0.05-0.08 per kWh versus $0.25-0.35 retail, an 80% reduction in export value.
This shift has dramatically changed the solar economics in California. Under NEM 3.0, maximizing self-consumption is critical. Battery storage systems, which were optional under NEM 1.0 and 2.0, have become economically essential for optimizing NEM 3.0 returns. This calculator models all three NEM versions simultaneously so California solar professionals can accurately communicate the difference and make the case for battery pairing.
Grandfathering is also critical: NEM 1.0 customers keep their rates for 20 years from interconnection. NEM 2.0 customers were grandfathered for 15 years under the original ruling (now extended). Knowing a client's current NEM status and the grandfathering deadline affects whether retrofitting to NEM 3.0 or staying put is the right advice.
Models NEM 1.0, NEM 2.0, and NEM 3.0 ACC-based export rates simultaneously so you can show the financial impact of each version with a single set of inputs.
Calculates the battery storage uplift value under NEM 3.0 by modeling self-consumption improvement and reduced exports at low ACC rates versus grid imports at retail rate.
Displays remaining grandfathering period for NEM 1.0 and 2.0 customers based on interconnection date, showing exactly how long existing rate benefits are protected.
Every California solar sale now involves a NEM 3.0 discussion. Use this calculator to show clients the exact dollar impact of their NEM version and why battery storage has become a recommended part of every new system in California.
For existing NEM 1.0 and NEM 2.0 customers considering system expansions, adding storage, or relocating to a new property: this tool quantifies exactly how much their grandfathered status is worth and when it expires.
Under NEM 3.0, the ROI on battery storage is substantially better than under NEM 2.0. Use the battery uplift value output to build the financial case for adding a Powerwall, Enphase IQ Battery, or Franklin WH home battery system.
Input the solar system size in kW and estimated annual generation in kWh. If you have actual production data, use that. Otherwise the calculator estimates annual generation based on system size and California average peak sun hours.
Choose between PG&E, SCE, or SDG&E. Each California investor-owned utility has different retail rates and slightly different NEM 3.0 ACC rates. This affects the NEM 2.0 Non-Bypassable Charge (NBC) deduction and the NEM 3.0 export credit values.
If the customer is already on NEM 1.0 or NEM 2.0, enter their interconnection date to calculate remaining grandfathering period. New customers will automatically model NEM 3.0 as the applicable tariff for new interconnections.
Enable the battery option to see how adding a home battery system changes the NEM 3.0 economics. The calculator models increased self-consumption, reduced grid exports, and time-of-use optimization value for battery-paired systems.
The calculator displays annual export benefit, 25-year projection, and battery uplift value for each NEM version. Use the comparison to explain to clients exactly why their NEM version matters and whether adding battery storage is worth the investment.
Export benefit depends on which portion of generation is self-consumed (avoided at retail rate) versus exported (credited at the applicable NEM tariff rate). The formulas below show each scenario.
NEM1_Benefit = Export_kWh x Retail_Rate
Where Export_kWh = Annual_Gen - Self_Consumed_kWh
Self_Consumed = Annual_Gen x self_consumption_rate (typically 0.30-0.40)NEM2_Benefit = Export_kWh x (Retail_Rate - NBC_Rate)
Where NBC_Rate (Non-Bypassable Charge) = approx $0.02-0.03/kWh
Effective_NEM2_Rate = Retail_Rate - NBC_RateNEM3_Benefit = Export_kWh x ACC_Rate
Where ACC_Rate = $0.05 to $0.08/kWh (time-varying, averaged here)
Note: ACC rates vary by hour, month, and utility territoryWithout_Battery: Export_Value = Export_kWh x ACC_Rate (~$0.06/kWh)
With_Battery: Exports shift to self-consumption at retail rate
Battery_Uplift = Shifted_kWh x (Retail_Rate - ACC_Rate)
= Shifted_kWh x (~$0.30 - ~$0.06)
= Shifted_kWh x ~$0.24/kWh additional value
Worked example: Under NEM 2.0 (California pre-April 2023): 10 kW system, 14,000 kWh/year, 8,000 kWh self-consumed, 6,000 kWh exported at retail $0.28/kWh. Export credit: $1,680/year. Under NEM 3.0: same 6,000 kWh exported at $0.06/kWh avoided cost rate. Export credit: $360/year — a 79% reduction. Adding 10 kWh battery storage recovers $900/year by shifting export to peak TOU hours under NEM 3.0.
Calculations sourced from SurgePV’s NEM Version Comparison Calculator — surgepv.com/tools/nem-version-comparison-calculator/
| Feature | NEM 1.0 | NEM 2.0 | NEM 3.0 |
|---|---|---|---|
| Export Rate | Full retail rate | Retail minus NBC | ACC rate ($0.05-0.08/kWh) |
| Rate Type | Flat retail credit | Retail minus NBC | Avoided Cost Calculator |
| Annual True-Up | Yes | Yes | Monthly net billing |
| Minimum Bill | NBCs only | NBCs only | $10/month minimum |
| Grandfathering Period | 20 years | 15 years (extended) | N/A - current default |
| New Applications | Closed | Closed | Open (current tariff) |
| Battery Incentive | None | None | SGIP program eligible |
| Typical Export Credit | $0.25-0.35/kWh | $0.22-0.32/kWh | $0.05-0.08/kWh |
| Billing Cycle | Annual true-up | Annual true-up | Monthly net billing |
| Grid Access Fee | None | None | None (removed in final rules) |
| Self-Generation Incentive | SGIP eligible | SGIP eligible | SGIP eligible |
Many sales reps still quote NEM savings using retail rate even for NEM 3.0 customers. This overstates annual savings by 75-85%. Always use ACC rates for NEM 3.0 export calculations or you risk proposals that significantly underperform client expectations after interconnection.
Under NEM 3.0, a 10 kWh battery can improve system value by $800-1,200 per year by shifting export to self-consumption. This changes battery payback from 10-12 years under NEM 2.0 to 6-8 years under NEM 3.0. Always model battery ROI separately for NEM 3.0 customers.
NEM 1.0 customers are grandfathered for 20 years from interconnection. If a NEM 1.0 customer refers a neighbor, the neighbor will be on NEM 3.0, not NEM 1.0. Never assume the referral will receive the same export rates as the existing customer.
PG&E, SCE, and SDG&E have different retail rates and NBC charges affecting NEM 2.0 calculations. SDG&E has the highest retail rates in the country (sometimes $0.50+/kWh in upper tiers), making solar economics strong even under NEM 3.0 for high-usage customers.
NEM 3.0, officially called the Net Billing Tariff (NBT), replaced NEM 2.0 for new California solar customers starting April 2023. The key difference is the export rate: under NEM 2.0, excess solar exported to the grid was credited at the retail rate (approximately $0.25-0.35/kWh). Under NEM 3.0, exports are credited at the Avoided Cost Calculator (ACC) rate of approximately $0.05-0.08/kWh, an 80% reduction. Self-consumed solar still avoids retail rate purchases at full value.
NEM 1.0 customers are grandfathered at their original export rate for 20 years from their interconnection approval date. For example, a customer who interconnected on NEM 1.0 in 2010 is protected at their NEM 1.0 retail rate until 2030. After grandfathering expires, they transition to the then-current tariff, which today would be NEM 3.0.
No. Once you are interconnected under a specific NEM version, you cannot voluntarily switch to a different version. NEM 1.0 is closed to new applicants. NEM 2.0 is closed to new applicants. All new interconnections are under NEM 3.0 (Net Billing Tariff). If a NEM 2.0 customer adds substantial system capacity (more than doubling), they may be transitioned to NEM 3.0 depending on utility policy.
Yes. The Self-Generation Incentive Program (SGIP) offers cash rebates for battery storage in California, with higher incentive rates for low-income customers and those in high fire threat districts. SGIP rebates currently range from $0.15 to $1.00 per Wh depending on program tier. NEM 3.0 customers are eligible for SGIP, and combining SGIP with the 30% federal ITC (which applies to solar-paired batteries) can significantly reduce battery upfront cost.
NEM 3.0 export rates are based on the Avoided Cost Calculator (ACC), which represents what the utility would have paid for that energy from other sources. ACC rates average $0.05-0.08/kWh annually, though they vary by hour and month. California retail rates range from $0.25 (baseline) to over $0.50 in upper tiers. This means NEM 3.0 exports are worth 15-25% of retail rate, compared to NEM 2.0 where exports were worth approximately 90-95% of retail rate.
Not immediately. Existing NEM 2.0 customers are grandfathered at their current export rates for 15 years from their interconnection date (this was extended from the original 9-year transition period following advocacy efforts). After grandfathering expires, they will transition to the then-current net billing tariff. NEM 3.0 does not retroactively apply to existing interconnected customers.
The Avoided Cost Calculator (ACC) is a tool developed by E3 Consulting for the California Public Utilities Commission to estimate the marginal cost the utility avoids when a solar customer exports energy to the grid. It accounts for avoided energy costs, capacity costs, transmission costs, and other grid services. ACC rates vary by hour and month, reflecting when solar exports are most valuable to the grid. The annual average ACC rate is approximately $0.05-0.08/kWh in 2024-2025.
Net Energy Metering (NEM) 1.0 and 2.0 measured net kWh at the meter on an annual basis and credited exports at or near retail rate. Net Billing (NEM 3.0) measures gross generation and gross consumption separately, credits exports at ACC rate monthly, and applies the credit against the monthly bill rather than accumulating annual banked credits. The shift from annual banking to monthly settlement and from retail to ACC export rates are the two most impactful NEM 3.0 changes.
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