Net Metering vs. Net Billing
~5 min read · Updated April 2026
If you remember one thing from this page: ask your installer how your utility compensates solar exports, in dollars per kWh. That number — not panel brand, not inverter type, not even $/watt — is the biggest single driver of your payback period.
Net metering (the original deal)
Your meter spins backward when you export. Every kWh exported offsets one kWh you'd buy later, at retail rates. If your retail rate is $0.25/kWh, each exported kWh is worth $0.25.
Result: short payback (6-9 years in good states), easy math, minimal need for a battery.
Net billing (what replaced it in CA, increasingly elsewhere)
You get paid a wholesale-ish rate for exports — often $0.03-$0.08/kWh, versus the $0.25-$0.45/kWh you pay to buy power. Solar is still profitable, but:
- Payback stretches by 2-4 years.
- A battery becomes much more attractive (store your cheap-to-generate kWh and use it instead of exporting it).
- Oversizing your system is penalized.
Where net billing is in effect
- California NEM 3.0 (active since April 2023)
- Arizona (grandfathered net metering, new installs on net billing)
- Hawaii (no net metering for new customers)
- Nevada (partial net metering with declining retail credit)
- Ongoing PUC proceedings in: NY, NC, FL, MI
How to check your utility
- Visit your utility's website → search "distributed generation tariff" or "solar interconnection."
- Find the "export compensation rate" (might be called avoided-cost, value-of-solar, or feed-in rate).
- Compare to your retail rate. If they match → net metering. If the export rate is < 50% of retail → net billing.