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Ace Studio, Plot No. 01B, 5th Floor, Sector 126,
Noida, UP 201303
India
Net Metering Policies and Updates: What
Homeowners Need to Know
https://www.premiumcad.com/
Ace Studio, Plot No. 01B, 5th Floor, Sector 126,
Noida, UP 201303
India
Thinking about going solar? Net metering can make or break your savings. It determines how
much you get paid for the extra electricity your panels send to the grid. Policies are evolving fast
at the state and local level—and those changes directly affect your payback period, system
sizing, and whether you add a battery. This guide explains net metering in simple terms,
highlights recent policy shifts, and shows you how to navigate them to protect your investment.
Key takeaways:
• Net metering rules vary by state and utility, and they’re changing fast.
• Shifts toward “net billing,” time-of-use rates, and export compensation reforms are
common.
• Smart system design and storage can protect your ROI even under reduced export rates.
• You can still unlock strong savings with the federal tax credit and the right rate plan.
What Is Net Metering?
Net metering is a billing arrangement between you and your utility:
• When your panels produce more than your home uses, that extra power flows to the grid.
• You receive credit for those exports.
• At night or on cloudy days, you draw from the grid and use your banked credits.
Ace Studio, Plot No. 01B, 5th Floor, Sector 126,
Noida, UP 201303
India
Under classic net metering (often called NEM), exports are credited at the full retail rate—
roughly the same rate you pay for electricity. That’s a strong value proposition because every
kilowatt-hour (kWh) you export offsets one you’d otherwise buy. But many states are moving
away from full retail credit toward versions that pay less for exports or pay different amounts
depending on the time of day.
Why it matters:
• Compensation rates influence how quickly your system pays for itself.
• Rules affect optimal system size and whether a battery makes sense.
• Rate structures (like time-of-use) change when your solar is most valuable.
The Big Picture: How Net Metering Is Changing
Across the country, regulators and utilities are adjusting compensation to better reflect grid costs
and solar’s value at different times. Three big trends stand out:
1) Transition from retail net metering to “net billing”
•
Instead of crediting exports at retail rates, utilities pay an “export rate” that’s often lower
than what you pay for electricity.
• Some states set fixed export rates. Others tie the rate to wholesale prices or a value-of-
solar calculation.
2) Time-based rates and export pricing
• Time-of-use (TOU) rates charge more during late afternoon/evening peaks and less
midday.
Ace Studio, Plot No. 01B, 5th Floor, Sector 126,
Noida, UP 201303
India
• New rules often pay less for midday exports (when solar is abundant) and more during
evening peaks.
3) Grid services and smart controls
• Programs are emerging that reward batteries and smart inverters for helping the grid at
peak times.
• Homeowners can earn extra by discharging during peaks or allowing utilities to manage
their battery a few times per year.
Recent Net Metering Policy Changes You Should Know
Note: Rules are local. Always confirm with your state energy office or utility. The examples
below illustrate common directions in policy.
California: From NEM 2.0 to NEM 3.0 (2023)
• What changed: California moved to “net billing.” Exports are credited based on hourly
values that often pay much less than retail during the day.
•
Impact: Systems still save money, but payback periods lengthen without a battery.
Batteries help shift solar to evening hours when rates are higher, improving returns.
• Takeaway: Storage is now a core part of many new California solar designs.
Arizona: Export Credits Replace Retail NEM
• What changed: Utilities issue fixed export credit rates that adjust periodically and are
lower than retail.
•
Impact: Solar-only systems still work, but the value of daytime exports is reduced. TOU
plans and right-sized systems help maximize self-consumption.
Ace Studio, Plot No. 01B, 5th Floor, Sector 126,
Noida, UP 201303
India
• Takeaway: Carefully match system size to your usage and consider TOU optimization.
Nevada: Tiered Credit Levels
• What changed: Nevada moved from retail NEM after a high-profile rollback and
settlement. Current credits are below retail, with tiered structures based on program
capacity.
•
Impact: Savings are solid but depend on enrollment timing and rate structure.
• Takeaway: Early program participation can lock in better rates.
Hawaii: No Traditional NEM; Emphasis on Battery and Grid Services
• What changed: Traditional retail NEM ended. New programs pay for controlled exports
and battery participation, reflecting Hawaii’s high solar penetration.
•
Impact: Batteries are central. Homeowners can earn by discharging at critical times.
• Takeaway: Solar-plus-storage and utility-aligned programs are the path to value.
New York: Value of Distributed Energy Resources (VDER)
• What changed: Instead of retail net metering, VDER assigns a “stacked” value to exports
(energy, capacity, environmental value, and location).