What NEM 3.0 actually means if you are buying solar in California
If you read anything about home solar written before 2023, it was probably describing a world that no longer exists. Under the old net metering rules in California, a kilowatt-hour you exported to the grid was credited at roughly the same rate you paid to buy one. Your meter effectively ran backwards, and the sensible strategy was to build the largest array your roof would take.
What changed
Under NEM 3.0 — formally the Net Billing Tariff — exported energy is paid at an avoided-cost rate rather than the retail rate. In practice that means a kilowatt-hour you consume the moment it is generated is worth what you would otherwise have paid, often around 30 to 40 cents in California. The same kilowatt-hour exported to the grid might earn five to eight cents, and considerably less in the middle of a sunny spring day when the grid does not need it.
That is roughly a five-to-one difference between using your own power and selling it, and it changes almost every downstream decision.
Why size matters more than it used to
The old advice — fill the roof — is now actively bad. An array built to your roof rather than to your consumption produces a large surplus at midday that you are effectively selling at a heavy discount. You paid retail prices for the panels producing it.
The right approach is to start from your annual consumption, which is on your utility bill, and size the system to serve it, with a modest allowance if you expect to add an electric vehicle or a heat pump. If a proposal is substantially larger than your usage, ask the salesperson to justify it in terms of what the extra production actually earns. It is a fair question and the answer is revealing.
Where a battery fits
A battery is what converts an export problem back into a self-consumption one. It stores the midday surplus that would have earned pennies and discharges it in the evening when you would otherwise buy at peak rates. Under the old rules a battery was mostly about backup; under NEM 3.0 it is a genuine part of the economics.
That does not automatically make it worth it. A battery adds significant cost, and whether it pays depends on the spread between your peak and off-peak rates and on how much surplus you actually have. Be clear about which product you are buying: a battery sized to shave your evening peak may not carry the house through a long outage, and one sized for outages is poor value if you rarely lose power.
Questions worth asking any solar salesperson
- What annual production do you model for this roof, and what shading assumptions did you use?
- How did you size this against my actual usage rather than my available roof area?
- What share of production do you expect me to self-consume, and what did you assume exports are worth?
- What is the price after incentives, and what exactly does each warranty cover — panels, inverter, workmanship, and the roof penetrations?
One sequencing point
If your roof is within about five years of needing replacement, do the roof first. Removing and reinstalling an array to re-roof underneath it is a real cost and it is entirely avoidable with better ordering.
See a system sized to your home — we size to estimated household consumption and cap it by what your roof can hold, and we show the working.