NEM 3.0 in Los Angeles: solar payback and battery planning

When California moved new IOU solar customers to the Net Billing Tariff in April 2023, every solar contractor in LA had to model payback differently. The math generally became less favorable for exported solar energy and more dependent on self-consumption, rate plan, battery sizing and evening usage. Start with our solar installation in Los Angeles hub, because HUS project experience shows that the best design is address-specific, not one-size-fits-all. If the roof is due for replacement, compare rack-mounted panels with our Tesla Solar Roof vs solar panels Los Angeles guide before locking the solar design.

What NEM 3.0 changed.

Under legacy NEM tariffs, participating customers received bill credits for excess generation exported to the grid during times when the system was not serving onsite load. Those legacy NEM tariffs are closed to new enrollments.

Under SCE's Solar Billing Plan, exported electricity receives Energy Export Credits that vary by hour and reflect the approved value of that generation to the grid. In practical terms, export value is often lower than the full retail rate a customer pays when importing power, although it can rise during higher-value hours, so self-consumption and battery timing matter. Residential customers who enroll before January 1, 2028 receive a nine-year Energy Export Credit price lock-in and may also receive an additional Energy Export Bonus Credit. These features do not replace address-specific modeling because usage, rate plan, system size and future electric loads still control the result. For homes near utility-boundary areas, compare SCE and municipal-utility assumptions with our LADWP vs SCE solar battery planning guide.

The implication: exported solar is often worth much less than electricity used directly at home. A battery can help shift more daytime solar production into evening use, which is why storage should be modeled before choosing a solar-only design. Homeowners comparing incentive assumptions should also review our SGIP battery incentive planning guide before finalizing Powerwall or Enphase storage numbers.

Illustrative 2026 payback ranges.

These planning ranges are based on HUS project experience across Los Angeles and should be treated as a starting point only. Final payback depends on the home's utility territory, usage pattern, rate plan, equipment, roof condition, financing, battery count, incentive eligibility and installation scope.

System configuration	SCE Solar Billing Plan review	LADWP review
Solar only, no battery	Model export value, self-consumption, rate plan and daytime load carefully.	Review LADWP rules separately because municipal utility rules differ from SCE.
Solar plus 1 Powerwall or similar battery	Model evening load shift, backup needs, SGIP eligibility and installed cost.	Review backup value, rate plan, battery cost and export-credit treatment.
Solar plus larger battery storage	Review higher backup coverage, EV or heat pump loads, panel capacity and budget.	Compare backup goals against added battery cost and project complexity.
Solar plus battery plus heat pump	Model whole-home electrification, panel capacity, solar sizing and financing.	Review utility rules, equipment timing, permits and load planning together.

Illustrative ranges only; actual payback depends on usage, rate plan, equipment, financing, and utility program rules.

Two clear patterns to review before choosing solar-only.

• →Battery can improve NEM 3.0 economics when it shifts daytime solar production into evening use, but the result depends on rate plan, usage, battery size and project cost.
• →LADWP customers need separate modeling because municipal utility rules differ from SCE. Battery value may come more from backup goals, rate plan strategy and future electrification than export-credit math alone.

Why solar-only needs a closer look in 2026

If your solar system has no battery and you're an SCE customer (see our SCE incentive 2026 guide) — or moving forward in 2026 a PG&E/SDG&E customer — here's what your typical day looks like:

• →Morning: Solar production begins while home load may still be low.
• →Midday: Solar production may exceed home usage, creating exports unless a battery or load-shifting strategy captures more energy.
• →Evening: Solar production drops while household load often rises.
• →Peak-use periods: A battery may help reduce grid imports if it is sized, programmed and paired correctly with the rate plan.

The issue is not that solar-only never works. The issue is timing: daytime exports may be credited differently than evening imports are charged. Under NEM 3.0/Solar Billing Plan rules, the system should be modeled around when the home produces power, when it uses power and whether a battery can shift more solar energy into evening use.

Right-sizing battery for NEM 3.0.

The right battery size for NEM 3.0 depends on daytime solar production, evening load, backup priorities, rate plan, panel capacity, EV charging, heat pump loads and budget. Use the table below as a planning screen, not a final sizing rule.

Home profile	Battery planning question	Why it matters
Smaller home or lower evening load	Would one battery cover priority loads and evening usage goals?	A smaller design may be enough for essentials if backup goals are limited.
Average home with central HVAC	Which loads should be backed up and which should stay off the backup panel?	HVAC, kitchen circuits and garage loads can change the battery design.
Home with EV charging	Should EV charging be scheduled, load-managed or excluded from backup?	EV charging can quickly change solar, battery and panel-capacity planning.
Larger home with heat pump or multiple major loads	Is a larger battery system or load-management strategy required?	Backup goals, panel capacity and budget should be reviewed before promising coverage.

If you're an LADWP customer, review LADWP rules separately.

LADWP is a municipal utility, so City of Los Angeles customers should review LADWP solar and battery rules separately from SCE Solar Billing Plan assumptions. Do not apply SCE NEM 3.0 math to an LADWP address without a separate utility review.

For LADWP customers in 2026.

• →Solar-only may still be worth reviewing, depending on usage, rate plan, equipment, financing and utility rules.
• →Solar plus battery should be modeled separately because backup value, evening usage, battery cost and rate plan can change the result.
• →LADWP incentive and program details should be reviewed separately from federal tax treatment rules and confirmed before using them in a payback calculation
• →Utility territory should be verified from the actual electric bill or utility account before modeling payback.

For LADWP customers, battery storage may still make sense for backup resilience, evening energy use, future electrification or comfort goals, but the financial case should be modeled separately from SCE assumptions.

FAQ

NEM 3.0 FAQs

How much do you get paid for exporting solar under NEM 3.0?

Under NEM 3.0 (the Net Billing Tariff / Solar Billing Plan for SCE, PG&E and SDG&E customers), you're not paid a flat rate for exported solar. Exports earn Energy Export Credits that change hour by hour based on the grid value of that energy, and they're generally worth less than the retail rate you pay to import power — especially midday when solar is abundant. That's why a battery often improves the economics: instead of exporting low-value midday power, you store it and use it in the evening when energy is more valuable. The exact credit values change over time, so the right move is to model your specific rate plan and usage. LADWP customers follow the municipal utility's own rules, not NEM 3.0, and should be reviewed separately.

What is the real NEM 3.0 solar payback period in Los Angeles in 2026?

Payback depends on usage, rate plan, equipment, financing, roof condition, battery configuration, utility territory and current program rules. Homeowners should model solar-only and solar-plus-battery options before choosing a system.

Is solar still worth it in LA under NEM 3.0?

For many SCE customers, solar can still make sense, but battery storage often changes the economics because export credits under the Solar Billing Plan vary by hour. The right answer depends on household load, rate plan, system size, financing and backup priorities.

How much does solar+battery cost in Los Angeles in 2026?

A typical solar-plus-battery proposal can vary widely based on system size, panel selection, roof complexity, battery count, electrical work, interconnection requirements, financing and incentive eligibility. Home Upgrade Specialist is not a tax advisor.