California homeowners shopping for solar are facing a different math problem than buyers did just a couple of years ago.

Under the state's new net billing rules, sending extra power to the grid pays far less than it once did. That shift is pushing many new buyers toward another major expense: battery storage systems that can cost over $14,000, according to ABC 10News San Diego.

Here's what to know

California's NEM 3 policy — the state's net billing tariff — reset the compensation rules for new rooftop solar customers when they send electricity to the grid.

For homeowners focused on cutting utility costs, the effect is straightforward: Extra solar power exported during the day is worth far less than it used to be.

Customers who connected before April 2023 stay on their original terms for 20 years from their connection date, Ryan Gallentine of the California Solar & Storage Association told ABC 10News. For anyone who went solar after that, the change was major. 

"It cut those export generation credits by about 80%," Gallentine said.

That changed the savings outlook for recent buyers, including San Diego Gas & Electric customers. 

"In everyday terms, the power that your panels send to the grid now earns about a quarter of what it used to," Gallentine told ABC 10News.

Going solar is still one of the best ways to save money on home energy, and solar leases in particular can deliver hundreds of dollars in monthly savings without any upfront costs. EasyHome's free explorer tool shows you potential savings from vetted installers in your area.

More background

The rule change didn't just reduce export credits; it also highlighted the importance of when households use the electricity their panels make.

Brian Grems of Stellar Solar told ABC 10News that before NEM 3, the best value usually came from midday solar production because customers received one-for-one credits. He added that NEM 3 puts more weight on evening electricity prices.

That leaves many new homeowners pursuing lower bills and cleaner energy with higher upfront costs. High energy bills were already squeezing households, and a policy that stretches out solar payback can make a money-saving upgrade less accessible.

What can be done?

Battery storage is the main way to adapt, as it lets households hold on to the electricity their panels produce and use it later when rates are higher.

"The smart move and what we've seen the industry move to is to use your own solar power instead of exporting it," Gallentine told ABC 10News.

Grems said batteries allow customers to "take control of the situation" by saving electricity for evening use instead of sending it back to the grid at a steep discount. That can help homeowners recover some of the value lost when export credits were reduced.

EnergySage data cited by ABC 10News put the cost of a standard home solar battery in California at over $14,000

EasyHome's free explorer tool can help people decide whether solar still makes sense. EasyHome can also help you explore backup battery options, and pairing solar with a battery lets homeowners maximize savings and keep the lights on when the grid goes down.

If you're weighing the investment, ask direct questions about pricing and return. 

"There is a payback period. It's now a little bit longer than it used to be, but it does still make economic sense," Gallentine told ABC 10News.

Where can I learn more?

These stories take a closer look at how NEM 3 is reshaping solar decisions in California.

• A California buyer learned NEM 3 can punish homes that skip battery storage.

• After export rates fell, one homeowner saw their bill barely move without batteries.

• In California, SDG&E's 4-to-9 pricing sent one homeowner shopping for a battery.

• In California, a renter tried to avoid NEM 3 traps by adding batteries.

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