Net Metering in 2026: What Changed and What It Means for You

Net metering and net billing are not the same thing

These two words get used as if they mean the same policy. They do not. Net metering credits every kilowatt-hour you send to the grid at the same retail rate you pay to buy power, a clean one-to-one swap. Send a unit at noon, pull a unit back at night, and your bill nets to zero on that trade. Net billing breaks that link. Your exports now earn a credit tied to what the utility would have paid to buy that power somewhere else, and that value changes hour by hour. Often it lands well below the retail rate you pay.

So the headline you keep hearing, that "net metering is going away," is half true. Full retail net metering is shrinking in some states. It has not vanished, and what replaces it usually has a name: net billing. The shift matters because it changes what your roof is actually worth. The power you use the instant you make it stays worth full retail. The power you export is worth less than it was. That single change reshapes how you should size and design a system in 2026.

What actually changed by 2026

Net metering was never one national law. Each state, and very often each individual utility, writes its own rules for how exported solar is paid. That is why two homeowners with identical roofs can get very different bills. By 2026, a clear trend has taken hold in the states with the most solar: a move away from full retail credit toward avoided-cost net billing, usually with grandfathering for people who connected under the old rules.

The economics behind the shift are simple to state. The average US residential electricity price sits around 16 to 17 cents per kilowatt-hour, and it keeps climbing with the cost of delivery and fuel (EIA, EIA on prices and factors). Retail rates bundle in the cost of poles, wires, and grid upkeep. Regulators argued that paying solar exports at that full bundled rate overpaid for raw energy. Net billing pays closer to the wholesale value of the power and nothing for the grid services baked into retail. Whether that is fair is a live debate. What it means for you is concrete: exports are worth less, and timing is worth more.

California NEM 3.0: the headline case

California is the example everyone points to, because it has the largest rooftop solar market and it moved first at scale. The state's third version of its rules, widely called NEM 3.0, is officially the Net Billing Tariff. It applies to interconnection applications submitted on or after April 15, 2023. Customers who applied before that date kept their earlier terms for a set period.

Under the Net Billing Tariff, exports are no longer credited at retail. They are valued using avoided-cost rates that vary by hour, season, and even by day, reflecting what the grid would have paid for that energy at that moment. Midday export credits dropped sharply, because California has so much solar on the grid at noon that extra noon power is cheap. Late-afternoon and evening exports, when the grid is strained, are worth much more. The state regulator frames the goal this way:

The Net Billing Tariff is designed to move customers toward exporting power when the grid needs it most and to make pairing solar with storage the more rewarding choice, by valuing exported energy at its hourly avoided cost rather than the flat retail rate.

California Public Utilities Commission, Net Billing Tariff (paraphrased)

If you live in California, the practical takeaway is that a battery is no longer an upgrade you add later for resilience. It is central to the savings case (CPUC NEM revisit).

Why self-consumption and storage now matter more

Self-consumption means using your solar power on site instead of exporting it. Under full retail net metering, self-consumption and export were worth roughly the same, so it barely mattered when you used your power. Under net billing, the gap is large. A unit you consume directly offsets a full retail unit you would have bought. A unit you export earns the lower avoided-cost credit. The wider that spread, the more a homeowner gains by keeping power at home.

This is where storage earns its keep. A battery soaks up the cheap midday solar your home does not need and releases it in the evening, when grid power is most expensive and when export credits, if you have none left to sell, would be lowest anyway. Instead of exporting noon power for a few cents, you store it and avoid buying evening power at full retail. The Department of Energy's homeowner guide walks through how panel-plus-battery setups change the value equation (DOE). The short version: net billing rewards the household that controls when its solar gets used.

Full retail vs net billing vs no net metering

Three broad export rules exist across the country, and they call for different strategies. Here is how they compare.

One table will not tell you your own number. The credit values, the time windows, and the grandfathering rules all come from your specific utility tariff. That is the document to find next.

How to check your own net-metering rules

You do not have to guess what your exports are worth. The terms are public. Work through this list and you will know your situation before any salesperson tells you theirs.

• Find your utility's name on your electric bill, then search its site for "net metering," "net billing," or "solar tariff."
• Check whether your state uses full retail net metering, an avoided-cost net billing tariff, or no export credit at all.
• Note the export credit rate and whether it is flat or changes by hour and season.
• Look for a grandfathering clause and the cutoff date that decides which rules apply to a new application.
• Confirm whether you are on a time-of-use rate, since that sets when imported power costs the most.
• Check for any monthly fixed charge or minimum bill that applies to solar customers.
• Ask for a quote that models savings against your actual tariff, not a generic national average.

Consumer Reports keeps a plain-language primer on how these plans differ if you want a neutral starting point (Consumer Reports).

Is solar still worth it under the new rules

For most homeowners, yes, but the reason has shifted. Solar used to pay off largely by banking export credits at retail. Now it pays off mostly by cutting the power you buy. With the average residential rate near 16 to 17 cents and rising, every kilowatt-hour your panels cover is a kilowatt-hour you stop buying at a price that tends to go up each year (EIA). That avoided cost is the core of the savings case under net billing.

Hardware prices help. Installed solar costs have fallen over the long run, and pairing a battery is cheaper relative to its value than it was a few years ago (EnergySage). The honest answer is that payback periods stretched somewhat in states that moved to net billing, and a battery is closer to required than optional there. But a system designed for the new rules, sized to your use and timed to your rate, still beats paying a utility bill that climbs every year.

Two factors decide whether the numbers land for you. The first is your rate: a high retail price and a steep evening time-of-use charge both push the case in your favor, because the power you avoid buying is expensive. The second is your usage shape. A home with high daytime use captures most of its solar directly and needs less storage. A home that empties out by day and fills up at night gets more from a battery. Neither profile is wrong. They simply point to different system sizes, and the only way to know yours is to run your real usage against your real tariff (Consumer Reports).

What people get wrong about net metering

A few myths cost homeowners real money. These are the ones worth clearing up before you sign anything.

• "Net metering is gone everywhere." No. Many states still offer full retail net metering. The shift to net billing is real but uneven, and it is set state by state.
• "More panels always means more savings." Under net billing, panels that only ever export at midday earn the lowest credit. Past a point, a battery saves more than another row of panels.
• "A battery is just for blackouts." Backup is a benefit, but the daily job of a battery under net billing is to shift cheap solar into expensive evening hours.
• "My neighbor's deal is my deal." If they connected under older rules or sit in another utility's territory, their credit terms can be completely different from yours.
• "The national average rate tells me my savings." Averages hide everything that matters here. Your tariff, your time-of-use windows, and your usage pattern decide the number.

Designing a system for net billing

If your utility has moved to net billing, the design questions change. Sizing to your total annual use, the old default, can leave you exporting a lot of midday power for very little. The better approach starts with your usage shape. How much power do you use during the day, how much in the evening, and what does your rate charge at each hour? From there, you size panels to cover daytime use and add storage to carry solar into the costly evening window.

This is the part where a generic estimate fails you, because the answer depends entirely on your tariff. That is the problem Enact built its tool to handle. Enact models your savings against your specific utility tariff in a free proposal, so you see the real export credits, time-of-use windows, and battery payoff for your address rather than a national guess (Enact for homeowners). If you are in the state at the center of this shift, Enact has a California residential solar page that walks through what NEM 3.0 means for a system there (Enact California residential solar). The rules got more detailed. The right move is to model them against your own bill, then design for the hours that actually pay.