NEM 3.0 in San Diego: Is Solar Still Worth It in 2026?
Yes, solar is still worth it in San Diego under NEM 3.0, but the math changed. California's net-billing rules cut solar export credits by roughly 75–85%, so pairing your system with a battery is now what protects your savings. Here's exactly how NEM 3.0 works and how to come out ahead.
What actually changed
What is NEM 3.0 (net billing)?
NEM 3.0, officially the Net Billing Tariff, is California's current rule for how utilities like SDG&E credit the solar power you send to the grid. It took effect in April 2023 for new systems. Instead of crediting exports at the full retail rate (NEM 2.0), NEM 3.0 credits them at a much lower ‘avoided cost’ rate that changes by hour and season.
How much did SDG&E export rates drop?
Under NEM 2.0, exported solar earned roughly the retail rate, about $0.46/kWh. Under NEM 3.0, exports earn an avoided-cost rate that averages around $0.05–0.08/kWh, a 75–85% reduction. The credit is highest during summer evening peak hours, which is exactly when a battery lets you use (or export) your stored power for maximum value.
Is solar still worth it in San Diego under NEM 3.0?
Yes. SDG&E has some of the highest electricity rates in the nation (~$0.47/kWh), so every kilowatt you generate and use yourself still delivers big savings. Solar-only payback now runs about 10–14 years; adding a battery brings it back to roughly 6–10 years, followed by decades of low-cost power.
Why a battery is the key under NEM 3.0
Because exports are worth so little now, the winning strategy is to store your midday solar in a battery and use it yourself during expensive evening peak hours instead of buying from SDG&E. A battery also keeps your home powered during outages, and California's SGIP rebate can offset much of the cost. See our battery & storage and Tesla Powerwall pages.
How to maximize value under NEM 3.0
- Size for self-consumption, design the system around using your own power, not exporting it.
- Add storage, a Tesla Powerwall or Enphase IQ Battery shifts solar to peak hours.
- Claim incentives, the 30% federal tax credit plus SGIP.
- Work with a local installer who designs for NEM 3.0 from day one.
NEM 3.0 FAQ
What is NEM 3.0 and how does it affect San Diego homeowners?
NEM 3.0 (the Net Billing Tariff) is California's rule for crediting solar exports. For San Diego homeowners it means power sent to SDG&E earns about 75–85% less than under NEM 2.0, so the best approach is now to store your solar in a battery and use it yourself.
How much are SDG&E export rates under NEM 3.0?
Roughly $0.05–0.08/kWh on average, compared with about $0.46/kWh retail under NEM 2.0, a 75–85% drop. Rates are highest during summer evening peak hours.
Is solar still worth it in San Diego under NEM 3.0?
Yes. With SDG&E rates near $0.47/kWh, solar still saves homeowners thousands a year. Adding a battery keeps payback in the 6–10 year range under NEM 3.0.
Do I need a battery with solar under NEM 3.0?
It's highly recommended. Because export credits are low, storing your solar and using it during peak hours (instead of exporting it cheaply) is what preserves strong savings, and it adds outage backup.
Does the 30% federal tax credit still apply?
The federal solar tax credit applies to eligible systems and is a major incentive. Rules and timing can change, so we walk you through exactly what your project qualifies for.
Get a NEM 3.0-ready solar quote
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