NEM 3.0 Explained: What It Means for San Diego Solar
August 7, 2026
If you are considering solar in San Diego, you have probably heard about NEM 3.0. The California Public Utilities Commission replaced Net Energy Metering 2.0 with NEM 3.0 (also called the Solar Billing Plan) in April 2023. It fundamentally changed how solar homeowners are paid for excess energy.
What Changed from NEM 2.0 to NEM 3.0?
Under NEM 2.0, solar homeowners were paid close to retail rates for excess energy sent back to the grid. If SDG&E charged you $0.40 per kWh, you got roughly $0.40 in credit for every kWh you exported.
Under NEM 3.0, export rates dropped by about 75%. You now get roughly $0.08 to $0.12 per kWh exported, depending on the hour. But you still save the full retail rate for every kWh you consume directly from your solar panels.
Does Solar Still Make Sense Under NEM 3.0?
Yes, but the strategy changed. The key is maximizing self-consumption - using your solar energy directly rather than exporting it.
SDG&E rates are so high ($0.40-$0.55/kWh) that every kWh you offset with solar saves you significant money. A system sized to match your daytime usage plus battery storage is now the optimal setup.
Why Batteries Are Essential Under NEM 3.0
Under NEM 2.0, the grid was effectively your battery. You exported excess daytime solar and drew from the grid at night, settling up annually.
Under NEM 3.0, that math no longer works. Exporting at $0.08 and buying back at $0.50 is a terrible deal. A Tesla Powerwall stores your daytime solar for evening use, avoiding both the cheap export and the expensive import.
How to Size Your Solar System for NEM 3.0
Under NEM 2.0, oversized systems were fine because excess production earned full retail credit. Under NEM 3.0, you want a system that covers your daytime usage plus enough to charge your battery for nighttime use. Oversizing beyond that wastes money because exports pay so little.
We analyze your hourly energy usage and design a system plus battery sized for maximum self-consumption. Book a free consultation to get started.
Grandfathering: Are You Still on NEM 2.0?
If you installed solar before April 2023, you are likely grandfathered into NEM 2.0 for 20 years. If you are adding panels to an existing NEM 2.0 system, be careful - expanding by more than 10% may move you to NEM 3.0. Check with us before expanding.