SCE Net Metering 3.0 Explained: What It Actually Means for Solar Customers in 2026

What Net Metering Actually Is

Net metering is a billing arrangement where your solar production and your grid consumption are measured together. When your panels produce more power than your home is using at that moment, the excess flows into the grid. SCE tracks that export and credits your account.

The word "net" means you pay for the difference between what you pulled from the grid and what you sent to it. The question is: at what rate does SCE credit your exports?

Under NEM 1.0 (closed to new customers), credits were dollar-for-dollar at retail rates. Under NEM 2.0 (closed April 15, 2023), credits were close to retail with some charges. Under NEM 3.0 - the only option for new solar customers today - exports are credited at the Avoided Cost Calculator (ACC) rate, which averages approximately 8 cents per kWh.

The Rate Gap That Defines NEM 3.0

Understanding NEM 3.0 comes down to one comparison:

Every kilowatt-hour of solar you use directly in your home saves you 34.5 cents (at peak rates) in grid purchases. Every kilowatt-hour you export to the grid earns you about 8 cents. Self-consumption is roughly four times more valuable than exporting.

This is why right-sizing your system matters more under NEM 3.0 than it did under NEM 2.0. An oversized system that consistently exports large amounts at 8 cents delivers a worse return on investment than a system sized to match your actual consumption.

How SCE NEM 3.0 Billing Actually Works Month to Month

SCE uses time-of-use billing for solar customers. The rate you pay for grid power - and the rate you earn for exports - varies by time of day and by season.

On the TOU-D-PRIME plan (the most common plan for SCE solar customers with higher usage):

• On-peak (4pm-9pm all days): ~34.5 cents per kWh to import
• Off-peak (all other hours): ~28-30 cents per kWh to import
• Super off-peak (winter nights): ~14-18 cents per kWh
• Export rate (ACC): approximately 4-20 cents per kWh depending on time and season

Your solar panels produce power roughly from 7am to 5pm, peaking between 11am and 2pm. That midday production is off-peak for import purposes, so its avoided cost is around 28-30 cents per kWh for direct self-consumption. But it earns only around 4-10 cents per kWh if exported during that same off-peak window.

The on-peak window (4pm-9pm) overlaps with late afternoon solar production, especially in summer. Production during that window, if self-consumed, saves 34.5 cents. A battery that stores midday production and discharges during the 4pm-9pm window effectively extends your highest-value self-consumption hours.

The 12-Month True-Up: How It Works

SCE solar customers receive monthly bills showing net usage, but the final accounting happens once a year at your true-up month. Here is how it works:

1. Monthly billing: Each month, SCE shows your net grid usage (imports minus exports). You pay only the minimum monthly charge if your solar covered everything.
2. Credit banking: In months where your solar produces more than you consume, you build an energy credit balance. Summer is typically the highest production period for Temecula homes.
3. True-up month: At your annual anniversary date, SCE calculates your net position for the full year. If you are in credit, that excess is paid out at a low settlement rate (less than 5 cents per kWh). If you owe, you pay the balance.
4. Reset: Your account resets for the next 12-month period.

Seasonal Banking and Winter vs Summer

Temecula and Murrieta benefit from 7 or more peak sun hours per day year-round, but summer production is significantly higher than winter. A well-sized system will:

• Overproduce in summer months (April through September), banking credits
• Draw down those credits in winter months (October through March) when production drops but heating and lighting use increases
• Net close to zero or slightly positive across the full 12-month cycle

This seasonal swing is normal and expected. A system sized to your annual consumption - not just your peak summer bill - is the right target.

Grandfathering: NEM 1.0 and NEM 2.0 Customers

If you already have solar under NEM 1.0 or NEM 2.0, your billing structure is protected for 20 years from your interconnection date. SCE cannot move you to NEM 3.0 against your will during that period.

NEM 2.0 was closed to new applications on April 15, 2023. If you interconnected before that date, you are on NEM 2.0 through approximately 2043. NEM 1.0 grandfathering dates vary by interconnection date.

If you are a new solar customer in 2026, you will interconnect under NEM 3.0. There is no workaround or special application process to get NEM 2.0 rates.

What NEM 3.0 Means for How You Size and Design Your System

The design approach that worked under NEM 2.0 - install as many panels as the roof can hold, export freely, bank credits - is less optimal under NEM 3.0. Here is what changes:

A good installer under NEM 3.0 will model your 12-month consumption pattern, account for EV charging if applicable, and design a system that self-consumes 85-95% of its production. That might mean a slightly smaller system than you expect - and that is the right answer.

For more on NEM 3.0 and how it interacts with PPAs and loan financing, see our post on NEM 3.0 and solar PPAs in California.

Does Solar Still Make Financial Sense Under NEM 3.0?

Yes - with the right system design. The economics shifted but did not disappear. For a Temecula homeowner with a $300 monthly SCE bill:

• An 8-9 kW system sized to match consumption offset 85-90% of annual usage
• Monthly net bill drops from $300 to $30-50 (minimum monthly charges plus small grid draws)
• Annual savings: $2,800-3,200 on a system costing $12,000-14,000 after incentives
• Payback period: 4 to 5 years under favorable conditions, 6 to 8 years more conservatively

NEM 3.0 raised the bar for system design quality. Homeowners who work with an installer who models their consumption correctly and avoids oversizing still see strong returns.

Frequently Asked Questions

What is the NEM 3.0 export rate for SCE customers?

Under NEM 3.0, SCE pays approximately 8 cents per kWh for excess solar you export to the grid, based on the Avoided Cost Calculator (ACC) rate. This rate varies by time of day and season but averages around 8 cents. This compares to an import rate of up to 34.5 cents per kWh during peak hours on the TOU-D-PRIME plan.

How does the SCE 12-month true-up work for solar customers?

SCE bills solar customers on a monthly basis but settles the account annually at your true-up month. Throughout the year, your bill shows net usage. If you produced more than you consumed in a given month, those credits accumulate. At the true-up, any remaining credit balance above the minimum monthly bill is paid out at a low settlement rate. You cannot carry large credit balances forward past the true-up month.

Are NEM 1.0 and NEM 2.0 customers grandfathered?

Yes. Customers who interconnected under NEM 1.0 or NEM 2.0 keep their existing tariff for 20 years from their interconnection date. If you went solar before April 15, 2023 on NEM 2.0, you stay on NEM 2.0 through roughly 2043. New solar customers who interconnect after that date must use NEM 3.0.

When does solar produce the most valuable power under NEM 3.0?

Under NEM 3.0's ACC rate structure, solar exported during the afternoon peak (roughly 4pm-9pm) earns significantly more than midday exports. However, self-consuming solar during that same window - by using stored battery energy or shifting appliance use to that window - is even more valuable because you avoid the 34.5 cent import rate instead of earning the export rate.

Does a solar system still make sense under NEM 3.0?

Yes, but the design matters more than it did under NEM 2.0. Right-sizing the system to match consumption is more important because oversized systems that export large amounts earn low returns on that excess. Systems designed to self-consume most of their production - especially when paired with a battery - still deliver strong economics for most SCE customers in Temecula and Murrieta.