Tools

Net Metering vs Net Billing (NEM 3.0) Payback Calculator

Under NEM 3.0, exported solar earns avoided-cost rates instead of near-retail credit. Enter your system and rates to see payback side by side under the old and new rules.

Your system & rates

Typical US range: 1,200–1,900 depending on location and roof.

Share of solar production used at home instead of exported. Batteries and daytime loads raise it.

NEM 3.0 pays avoided-cost rates, roughly $0.04–0.05/kWh on average.

California Net Surplus Compensation, roughly $0.04/kWh: surplus above annual imports earns this, not the retail rate.

The 30% federal residential credit (25D) ended Dec 31, 2025 — leave 0 for new systems; set 30 only if your system qualified earlier.

System cost after tax credit$22,400Gross $22,400 before credit
Annual production13,200 kWh7,920 kWh self-consumed · 5,280 kWh exported
Annual bill without solar$3,360
Payback — NEM 2.0 (classic net metering)6.6 yearsYear-1 savings $3,416 · 25-year savings $124,559
Payback — NEM 3.0 (net billing)8.1 yearsYear-1 savings $2,772 · 25-year savings $101,065
Cumulative savings milestones
YearNEM 2.0NEM 3.0
1$3,416$2,772
5$18,138$14,717
10$39,165$31,778
15$63,541$51,556
20$91,800$74,485
25$124,559$101,065
Import and export rates escalate yearly at the rate above; production and consumption held constant.

How it works

NEM 3.0 replaced near-retail export credit with avoided-cost rates that vary by hour. That makes self-consumption the lever: every kWh used at home is worth the full import rate, while exported kWh earn only a few cents. A battery, daytime loads, or load shifting raise self-consumption and shorten NEM 3.0 payback.

Assumptions & sources

  • Bill with solar = imported × import rate − retail-credited exports × export rate − annual surplus × surplus (NSC) rate. Retail credit is capped at annual imports; exports above imports earn the surplus rate, not retail. A negative bill is shown as a credit, not floored at $0.
  • NEM 2.0 annual surplus: California pays Net Surplus Compensation (roughly $0.04/kWh), not the retail rate, for net annual surplus generation.
  • Payback = net cost after tax credit ÷ year-1 savings. 25-year totals escalate import and export rates yearly; production, consumption and degradation are held constant.
  • NEM 3.0 export default ($0.045/kWh) reflects California avoided-cost averages; your utility's hourly values differ.
  • Estimates only — not a quote. Actual bills depend on your tariff, rate plan, shading and installer pricing.

Related Joule Post coverage: Net metering vs net billing, explained · Net metering, explained