Solar Net Metering Math: What NEM 3.0 Actually Costs Your Customer
The contractor who can explain NEM 3.0 to a California homeowner in five minutes closes 40% more solar bids than the contractor who hand-waves the export math. The rules aren't complicated. They've just been rewritten three times in four years and most installers are still bidding the old ones.
What changed under NEM 3.0
Under NEM 2.0 (California, 2016-2023), exported kWh credited at near-retail rates — typically 25-32¢/kWh depending on TOU period. Under NEM 3.0 (April 2023+), exports credit at an "Avoided Cost Calculator" rate — typically 5-12¢/kWh, with TOU multipliers that boost evening hours to 25-50¢ and crush midday hours to 3-5¢.
The result: an oversized system that exports midday surplus is now losing money on every exported kWh relative to the retail price.
The math on a typical California home
A homeowner using 12,000 kWh/year, with an unshaded south-facing roof:
Under NEM 2.0: An 8.5 kW system produces ~12,800 kWh/year. Export credits offset import draws. Bill goes to ~$10/month (interconnect minimum). Payback ~7 years.
Under NEM 3.0, same system: Now the midday surplus exports at 4¢/kWh while the evening imports cost 36¢/kWh. The bill goes to ~$45/month. Payback stretches to 11-13 years.
Under NEM 3.0 with battery: The same 8.5 kW system plus a 13.5 kWh battery shifts the midday surplus to evening discharge, avoiding the worst export-import differential. Bill goes back to ~$15/month. Payback ~9 years.
The honest answer for California is: solar alone under NEM 3.0 is OK; solar + battery is the bid.
What to put in front of the customer
Three line items every California solar bid should carry:
- A production estimate from PVWatts. Defensible. Not from a brochure.
- A TOU bill model showing what their bill will actually look like by month with the new system + tariff. PG&E E-ELEC, EV2-A, and TOU-C are different shapes.
- A battery option modeled at the homeowner's actual evening usage profile. The battery isn't always the right answer — a homeowner who runs heavy midday loads (pool pump, EV charging at lunch) may not need one.
How Estimate.Pro handles it
The solar trade template in Estimate.Pro carries TOU period tables for every California IOU plus the major munis. You enter the customer's 12-month kWh from the utility bill; the engine returns a self-consumption ratio, an annual export profile, and a TOU-weighted savings number — not a "you'll save $1,800/year" guess. The battery sizing optimizer runs on the customer's actual usage profile, not a generic curve.
The bottom line
Customers buy solar because they want to lower their bill. Under NEM 3.0 the math that lowers their bill is different than it was three years ago. Bid the new math, not the old one, and your close rate stops fighting the tariff.