Net billing is the default now, and it changes what a solar panel is for
California settled it in D.22-12-056. Exports are paid at grid value, not retail — which turns solar from a meter-spinning play into a self-consumption one.
The CPUC adopted D.22-12-056 in December 2022, establishing the Net Billing Tariff as successor to NEM 2.0. Customers applying to interconnect from 15 April 2023 onward take service on it. D.23-11-068 cleaned up the remaining issues in November 2023.
The mechanical change is small to describe and enormous in effect. Under net metering, an exported kilowatt-hour offsets an imported one at retail. Under net billing, an exported kilowatt-hour earns what the grid says that hour is worth — tied to the state's Distributed Energy Resources Avoided Cost Calculator. Import still costs retail.
Why the gap is so large
Retail electricity prices bundle in generation, transmission, distribution, and a long list of programme costs. Avoided cost prices only the value of the energy at that hour and place. In the middle of a sunny afternoon, when every other solar array in the state is also exporting, that value is low. The two numbers were never going to be close.
The practical consequence is that a kilowatt-hour you use yourself is worth several times one you export. That single ratio reorders everything downstream of it: system sizing stops scaling with roof area and starts scaling with consumption; battery storage stops being a resilience luxury and becomes an arbitrage tool; and west-facing arrays that produce into the evening peak can beat south-facing ones that produce more total energy.
The NBT locks a customer's export compensation for their first five years, which makes the first five years easier to model than the twenty after them.
This is not only California
Arizona moved off retail-rate net metering in 2017. Nevada and Hawaii have their own successor structures. The pattern across states is consistent enough to plan around: successor programmes pay less for exports than the programmes they replace, and the direction of travel does not reverse.
Which is why this calculator settles every one of the 8,760 hours separately against your tariff's own export rule, rather than netting the year and multiplying by a blended rate. Under net metering that shortcut was roughly harmless. Under net billing it is the difference between a plausible answer and a wrong one.
Sources
- CPUC — Net Billing Tariff
- CPUC — Net Billing Tariff fact sheet (PDF)
- CPUC — NEM Revisit proceeding R.20-08-020
Run the numbers under these rules
The calculator already models the position described above — no federal residential credit on a purchased system, §48E in the hands of a third-party owner, and hourly settlement against your tariff's own export rule.
More policy
- The 30% residential solar credit is gone. What replaced it is not a credit.The 4 July begin-construction deadline has passed. What that means for commercial projects.