In this explainer

California's NEM 3.0 slashed what the grid pays for your solar power - from about 28 cents a kilowatt-hour to roughly a nickel. So is rooftop solar still worth it in 2026? Short answer - yes, but the math changed, and a battery is now part of it.

General information, not professional financial, tax, legal, or insurance advice. The Dreamy Leads Research Desk is an editorial and data team, not a licensed advisor.

Chapters

  1. 0:05 What NEM 3.0 changed
  2. 0:29 The export-credit cut
  3. 0:43 Why batteries became essential
  4. 0:57 What payback looks like now
  5. 1:12 The 25-year payoff
  6. 1:27 The federal credit changed too
  7. 1:31 Bottom line

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Full transcript

What NEM 3.0 changed

In April 2023, California switched to net billing - NEM 3.0. The big change: the credit you earn for sending solar power back to the grid dropped from roughly the retail rate, about 28 cents a kilowatt-hour, down to around a nickel. Exporting to the grid is no longer where the savings are. This is general information, not advice.

The export-credit cut

Under NEM 3.0, the credit for power you export fell by about 80 percent - from roughly 28 cents a kilowatt-hour to about five cents. That is the single biggest shift in the math.

Why batteries became essential

Because exported power is now worth so little, the smart move is to store it and use it yourself. That is why about 80 percent of new California solar installs in 2025 included a battery.

What payback looks like now

With a battery sized to your home, a typical California system now pays for itself in about nine to eleven years - a few years longer than under the old rules, but still well inside the system life.

The 25-year payoff

Over twenty-five years, a typical California home with solar and storage still nets on the order of fifty thousand dollars - even after NEM 3.0. Smaller than the old net-metering days, but solar still wins for most owners.

The federal credit changed too

There is also a 2026 federal change worth knowing.

Bottom line

So - is solar still worth it in California under NEM 3.0? For most homeowners who own their roof and pair panels with a battery, yes. The grid no longer pays you well for extra power, so the value is in making and using your own. Run your own numbers before you sign anything. This is general information, not advice.

Frequently Asked Questions

Is solar still worth it in California under NEM 3.0?

For most homeowners who own their roof, yes - but the economics now depend on adding a battery. NEM 3.0 cut export credits by roughly 80 percent (from about 28 cents per kWh to around 5 cents), so the savings come from storing and using your own power rather than selling it back. Typical payback with storage is about 9 to 11 years, with 25-year net savings often in the tens of thousands. This is general information, not advice.

Do I need a battery with solar under NEM 3.0?

Not required, but strongly favored by the new math. Because exported power earns only about a nickel per kWh under NEM 3.0, storing your solar in a battery and using it yourself captures far more value - which is why about 80 percent of new California installs in 2025 included a battery. This is general information, not advice.

Sources