NEM 3.0 is California's current rule for how solar homes are credited for the power they send back to the grid. Those credits are much lower than before, about 75% lower in SDG&E territory by one estimate.2 So the power a solar home uses itself matters more, and a battery lets it use that power after dark.
1. What is NEM 3.0?
NEM stands for net energy metering. It is the set of rules for how your utility credits the power your panels send to the grid when your home isn't using it. NEM 3.0 is the third version in California. SDG&E and SCE call it the Solar Billing Plan.3,4
2. What changed?
Under NEM 3.0, the credit for power you send to the grid dropped to what is called an avoided-cost rate. One estimate for SDG&E homes puts the drop at about 75% compared with the old rules.2
Credit for power sent to the grid, SDG&E homes, one estimate
About 75% lower under NEM 3.0 than under the old rules
Index, old rules = 100. Source: EnergySage, a third-party estimate, checked September 2026
3. Is NEM 3.0 final?
Yes. A California appeals court upheld the CPUC's decision on March 9, 2026, and in June 2026 the California Supreme Court declined to hear the case. It is the rule going forward.1
4. Why does a battery matter more now?
Because the grid now pays less for your extra daytime power, the power your home uses itself matters more. Panels make the most around midday. On the standard plans at PG&E, SCE and SDG&E, power costs the most from 4 to 9 p.m., when panels make little or none.4 A battery stores midday power for the evening.
SDG&E says its Solar Billing Plan is built to pair solar with a battery, because evening demand is high when the sun is down.3
5. Does NEM 3.0 change the fixed monthly charge?
No, that is a separate rule. In 2024 the CPUC set a fixed monthly charge of $24.15 for most homes, $12.08 for FERA customers and $6.00 for CARE customers. It is billed no matter how much your panels make.5
6. Which rate plan would you be on?
SCE requires Solar Billing Plan customers to be on its TOU-D-PRIME plan.4 Whatever your utility, ask which plan a quote assumes. The plan decides which hours cost the most.
Quick answers.
Is NEM 3.0 the same as the Solar Billing Plan?
Yes. SDG&E and SCE call their version of NEM 3.0 the Solar Billing Plan.
Can I still go solar under NEM 3.0?
Yes. NEM 3.0 changes how power you send to the grid is credited. It does not stop you from installing solar. Whether solar makes sense depends on your roof, your bill and your rate plan.
Do I need a battery under NEM 3.0?
You do not have to have one. But because power you send to the grid now earns less, a battery lets your home use more of its own solar power in the evening, when power is priced highest on the standard plans.
Sources.
- pv magazine USA, California Supreme Court declines to hear rooftop solar billing case, June 10, 2026.
- EnergySage, net metering in SDG&E territory, checked September 2026. A third-party estimate.
- SDG&E, Solar Billing Plan, checked September 2026.
- SCE, time-of-use plans, PG&E, time-of-use plans and SDG&E, pricing plans, checked September 2026.
- CPUC Decision 24-05-028, 2024.
