What Is Net Energy Metering in California?
By JC Pacific Corp Published 2026-09-01 Last professionally reviewed: September 2026
Net energy metering is a billing structure that addresses electricity a customer generates, uses, and exports to the grid. California solar customers may be served under different legacy NEM tariffs or the newer Net Billing Tariff, depending on utility, interconnection timing, eligibility, and system changes.
Why does the tariff matter?
The tariff affects:
- Export-credit value
- Monthly billing
- Annual settlement
- Rate-plan requirements
- Non-bypassable charges
- Battery economics
- Grandfathering
- System expansion
- Transfer treatment
What is commonly called NEM 3.0?
NEM 3.0 is the informal name commonly used for California's Net Billing Tariff for customers of the state's major investor-owned utilities who fall under the newer rules. Exported electricity is generally valued differently from electricity purchased from the grid, making self-consumption and battery timing more important.
Does the tariff transfer to a buyer?
Legacy treatment may continue through a property sale under applicable rules, but remaining eligibility, system modification, utility procedures, and rate selection must be verified.
CPUC publishes current Net Energy Metering program information for California utilities at CPUC Net Energy Metering .
Frequently Asked Questions
Is every California utility under the same solar tariff?
No. Municipal and publicly owned utilities may have different programs.
Does one exported kilowatt-hour cancel one imported kilowatt-hour?
Not necessarily under the Net Billing Tariff.
Can adding panels change legacy status?
A significant modification can affect eligibility. Ask the utility before changing the system.
Educational information
This content is for general educational purposes and is not legal, tax, appraisal, lending, electrical, engineering, construction, insurance, investment, utility-rate, or solar-production advice. Solar agreements, utility tariffs, incentives, tax rules, financing requirements, equipment warranties, and transfer procedures vary and change frequently. Buyers, sellers, and owners should consult appropriately licensed legal, tax, lending, insurance, real estate, electrical, solar, and appraisal professionals regarding a specific property. Never access, disconnect, modify, repair, or remove solar, battery, electrical, or utility equipment without appropriate authorization and professional qualifications. Battery systems may retain dangerous electrical energy even when other power appears disconnected.
Next step: Identify the utility, tariff, original interconnection date, and remaining legacy period before estimating savings.
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The next step is a conversation with a local agent.
JC Pacific Corp is an Irvine-based Southern California brokerage helping buyers navigate offers, escrow, and financing. Tell us what you are looking for and we will point you to current options across the region.
A note on legal advice: These guides provide general, educational information about California real estate practice. They are not legal advice and do not create an attorney-client relationship. Mortgage information is general education, not individualized lending, tax or legal guidance. For advice about your specific offer, contract, closing or financing, consult a qualified California real estate attorney and a qualified mortgage professional.