If you've researched solar in Southern California recently, you've probably heard of NEM 3.0. Officially called the Net Billing Tariff, it changed how investor-owned utilities like Southern California Edison (SCE) credit homeowners for the solar power they send back to the grid. Here's what it means for you.
What changed under NEM 3.0?
Under the older NEM 2.0 rules, every kilowatt-hour you exported earned a credit close to the retail price of electricity. Under the Net Billing Tariff, exports are credited at much lower "avoided cost" rates that vary by hour and season. Midday exports, when solar production peaks, earn the least.
The power you use yourself is still worth the full retail rate, and that's the key to designing a system that saves money today.
LADWP vs. SCE: which rules apply to you?
NEM 3.0 applies to customers of investor-owned utilities such as SCE. The Los Angeles Department of Water and Power (LADWP) is a municipal utility with its own net metering program, so many City of Los Angeles homeowners are on different rules. Check your bill to see which utility serves you; we design differently for each.
| SCE (Net Billing Tariff) | LADWP | |
|---|---|---|
| Export credit | Lower, time-varying rates | Utility's own net metering program |
| Battery value | High: store midday solar for evening use | Mainly backup power and resilience |
| Best design | Solar sized to self-consumption + battery | Solar sized to annual usage |
Why batteries matter more now
With a home battery, the extra solar you'd normally export at a low rate gets stored and used in the evening, when time-of-use rates peak between 4 and 9 PM. That shifts your energy from low value to high value, and as a bonus you get backup power during outages.
For most SCE customers, pairing solar with a battery is now the best way to maximize savings under the Net Billing Tariff.
Is solar still worth it?
Yes, for most homes. Electricity rates in Southern California are among the highest in the nation and keep rising. A correctly sized system, especially one with storage, still delivers strong long-term savings. The key is designing around how you actually use energy rather than simply maximizing panel count.
Want to see the numbers for your home? Try our solar calculator or request a free estimate.