SCE and SDG&E NEM 3.0: Southern California Solar in 2026

A plain-English look at how NEM 3.0 net billing changes the math for SCE and SDG&E solar customers in 2026, and why self-consumption and batteries matter more than they used to.

If you're shopping for solar in Southern California in 2026, the single biggest thing that's changed isn't the panels or the price — it's what your utility pays you for the power you send back to the grid. Under NEM 3.0 (officially the Net Billing Tariff), Southern California Edison and San Diego Gas & Electric generally credit your exported solar at rates well below the retail price you pay for electricity. That one shift quietly rewrites the math on a lot of quotes I read. I don't install anything, so I have no system to sell you — my whole job is to read your proposal and tell you straight whether the numbers hold up under the rules you're actually buying into.

What NEM 3.0 Actually Changed

Under the older net metering rules, a kilowatt-hour you exported was worth roughly the same as a kilowatt-hour you bought. Solar was almost like a savings account that ran your meter backward at full retail value. NEM 3.0 ended that for new SCE and SDG&E residential solar customers.

Now exports are credited at values tied to the grid's "avoided cost" — what your utility would have paid to source that power elsewhere — which changes hour by hour and season by season. In plain terms: the electricity you send back is generally worth a lot less than the electricity you pull from the grid later. The gap between those two numbers is the whole game.

Why "Self-Consumption" Is the New Goal

Because exports are credited low, the most valuable solar kilowatt-hour is one you use yourself the moment your panels make it. That's called self-consumption, and under NEM 3.0 it's worth far more than dumping power onto the grid at a discounted rate.

Here's the practical problem: solar peaks at midday, but most households use the most power in the evening — after the sun drops. So a daytime-heavy production curve paired with evening-heavy usage means you export cheap and buy back expensive. That mismatch is exactly why the conversation in SoCal has shifted toward storage.

Where Batteries Come In

A battery lets you store your midday production and use it in the evening instead of selling it back at a low export rate and rebuying it at full price hours later. Under NEM 3.0, that "store now, use later" behavior is where a lot of the real value lives for SCE and SDG&E customers.

I'm not here to tell you that you must buy a battery — that depends entirely on your usage pattern, your roof, and your budget. But I will tell you this: be skeptical of any 2026 SoCal quote that shows huge savings from a panels-only system without honestly accounting for low export credits. If the savings story leans on exporting a lot of power, ask the rep to show you the export rate they assumed and where it came from.

  • Ask whether the savings estimate models NEM 3.0 export values or older net-metering assumptions.
  • Ask what share of your production they expect you to actually use yourself versus export.
  • If a battery is in the quote, ask how much of the projected savings depends on it.

SCE and SDG&E Aren't Identical

People lump all of California together, but SCE and SDG&E are separate utilities with their own rate schedules, time-of-use periods, and export credit values. SDG&E in particular is known for high retail rates and its own time-of-use windows, while SCE has its own structure across a large, varied service territory.

What that means for you: a savings number that's reasonable for one utility can be off for the other. Whenever I review a SoCal proposal, I check which utility and which rate plan the installer modeled, because the export credits and time-of-use periods drive the result. Rates and tariff terms also change over time, so confirm your current plan directly with SCE or SDG&E rather than trusting a number from a sales deck.

Red Flags I Watch For on SoCal Quotes

A few things make me slow down and reread a Southern California proposal:

  • Savings projections that look like old full-retail net metering — that's a sign the rep is using stale assumptions.
  • Anyone still promising you a 30% federal residential tax credit. The federal residential solar credit changed for 2026 — that "30%" line is a tell that the rep is out of date. Check current federal rules and look into any California or local programs that may apply.
  • Pricing that's hard to compare. As a rough yardstick, installed residential solar often lands somewhere in the range of $2.50–$3.50 per watt before storage, but that's directional — verify it against your own quote and your own market.
  • Vague "your bill goes to zero" claims with no breakdown of self-consumption, export credits, and remaining grid charges.

What to Do Before You Sign

You don't need to become a tariff expert. You just need the quote to be honest about the rules it's built on. Confirm your utility and rate plan, ask how the export credits were modeled, and get clear on whether the savings depend on a battery. Then have someone with no system to sell you check the math.

That's the part I'm happy to do for free. Send me the proposal and I'll read it line by line, flag any markup or stale assumptions, and tell you whether it's fair for an SCE or SDG&E household in 2026 — no pressure, no pitch.

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