NEM 3.0 Explained: Why Your Solar Export Credit Dropped So Much
If you interconnected after April 2023, your solar exports aren't credited anything like they used to be — here's the actual mechanism, not just the headline number.
Under the old NEM 2.0 rules, exported solar electricity was credited at close to the retail rate — roughly 25–30 cents/kWh. NEM 3.0 (the Net Billing Tariff), which applies to anyone who interconnected on or after April 15, 2023, instead pays a variable rate tied to what the grid actually saves by not generating that power — typically 2–10 cents/kWh blended across a year.
The mechanism: Avoided Cost Calculator, not a flat rate
NEM 3.0 doesn't use one number. Each utility (PG&E, SCE, SDG&E) runs an hour-by-hour, month-by-month Avoided Cost Calculator (ACC) that estimates what it would have cost the utility to generate or buy that electricity elsewhere. Solar exports overwhelmingly happen in the middle of the day, exactly when the grid has the least need for extra power and the ACC value is lowest.
A kWh exported at 1pm might be worth a fraction of a cent under this model; a kWh exported at 7pm during peak demand could be worth several times more.
That's the real story behind the "your export credit dropped" headline: it's not an arbitrary cut, it's a shift from a flat retail-linked number to a variable, time-of-export-linked number that happens to be much lower for typical solar production hours.
The battery angle: why NEM 3.0 changed system design, not just economics
Under NEM 2.0, there was little financial reason to add a battery — exporting at near-retail rates and drawing back later at a similar rate was close to a wash.
Under NEM 3.0, the gap between a midday export rate and an evening peak rate is large enough that storing your own solar and either using it at night or exporting it during the evening peak captures far more value than exporting at midday.
This is a big part of why battery attachment rates on new California solar installs rose sharply after NEM 3.0 took effect.
NEM 3.0 also includes a temporary "ACC Plus" adder — an extra per-kWh bonus for the first 9 years — for customers on a low-income rate (CARE/FERA) or pairing solar with a qualifying battery, on top of the base export rate.
Where SGIP fits in
Separately from NEM 3.0's export rate, the Self-Generation Incentive Program (SGIP) pays an upfront per-kWh rebate toward the battery itself — roughly $150–$250 per kWh for most homeowners under the General Market tier, with significantly higher tiers for CARE/FERA-enrolled or high-fire-risk households. SGIP funding is step-based and can run out or waitlist, so it's worth checking current availability before counting on it.
Run your own numbers
Because the ACC rate varies by utility, time of year, and even time of day, there's no single "your export rate is X" answer — use our NEM 3.0 Export Rate Calculator for the current blended range, check the SGIP Battery Rebate Calculator for your battery incentive tier, or start from the California Solar Savings Calculator for the full picture.
Frequently Asked Questions
What is NEM 3.0?
NEM 3.0, officially the Net Billing Tariff, is the current framework for compensating homeowners for solar electricity they export to the grid in PG&E, SCE, and SDG&E territory, for anyone who interconnected on or after April 15, 2023. It replaced the older NEM 2.0 framework.
Why did my export rate drop so much under NEM 3.0?
NEM 2.0 credited exports at close to the retail electricity rate, roughly 25-30 cents/kWh. NEM 3.0 instead uses each utility's Avoided Cost Calculator, which values exported electricity based on what it actually costs the grid to serve that hour and season — typically 2-10 cents/kWh blended across a year, since most solar exports happen at midday when the grid needs power least.
Does a home battery make NEM 3.0 worthwhile again?
For many households, yes — a battery lets you store midday solar and use it (or export it) during the evening peak, when the Avoided Cost Calculator rate is highest, instead of exporting for a few cents at midday. NEM 3.0 also includes a temporary "ACC Plus" adder on top of the base export rate for qualifying customers with a battery.
This article is for general information only. Avoided Cost Calculator rates vary by utility and change over time — confirm your specific export rate with your utility's ACC lookup tool before making a system-sizing decision.