Is Solar Worth It in California? (NEM 3.0 Reality)

California has sky-high electricity rates, which makes solar very attractive — but the switch to NEM 3.0 changed the math. Solar is still worth it for many California homes; you just need to understand the new rules.

The California basics

• Electricity rate: among the highest in the US, around 30¢/kWh and often much higher on peak tiers — so every kWh of solar saves a lot.
• Sun: strong, roughly 5.5 peak sun hours/day.
• Great fundamentals — but the export rules matter more than ever.

See a worked example on our California solar cost page or the Solar Savings Calculator.

What changed: NEM 3.0

Under the older net metering, California exports earned near full retail credit. NEM 3.0 (net billing) cut the value of exported solar substantially. The practical effect:

• Exporting midday solar to the grid now earns much less.
• Using your own solar (and storing it) is far more valuable than before.
• A home battery has become close to essential to get strong returns — you store cheap/free daytime solar and use it during expensive evening peaks.

Understand the mechanics in what is net metering.

When solar is worth it in California

• Your bills are high (most CA homes) and your roof gets good sun.
• You add a battery to self-consume and cover expensive peak hours.
• You use a time-of-use strategy — store solar, discharge at peak.
• You own the system for the federal tax credit.

When to be cautious

• Solar without a battery under NEM 3.0 gives weaker returns than it used to.
• Shaded or undersized roofs.

Bottom line

California’s high rates still make solar compelling — but under NEM 3.0, solar + storage is usually the winning combination, not solar alone. Model it with the Solar Savings Calculator and size backup with the Battery Size Calculator.

Educational estimates only. Confirm current utility tariffs and NEM rules.