The short answer
- Net billing (the CPUC's Net Billing Tariff, called the Solar Billing Plan by SCE and SDG&E, and "NEM 3.0" by most people) applies to systems that applied for interconnection on or after Apr 15, 2023.
- You pay for every kWh you take from the grid, and earn an hourly export credit for every kWh you send back. Exports are worth little at midday and more on summer evenings.
- Export values are locked for 9 years for customers who join in the first five years, but the lock belongs to you, not the house.
- It doesn't apply to LADWP or other city-run utilities, which set their own rules.
How the bill works
Under NEM 2.0, a kWh you exported cancelled a kWh you used later, at nearly the same price. Under net billing they never cancel: imports are billed at your time-of-use price, and exports earn a dollar credit set by the CPUC's Avoided Cost Calculator for that month, hour and day type (D.22-12-056). Credits roll forward and are settled once a year at your true-up. You pay all charges monthly; there's no annual-pay option.
The CPUC says export values are "usually lower than import rates" but can top retail prices on late-summer evenings. SCE's own examples: about $0.21 per kWh for summer evening exports versus about $0.03 for winter daytime exports (SCE).
The required rate plan
New net-billing customers must take an electrification time-of-use rate: TOU-D-PRIME at SCE or EV-TOU-5 at SDG&E. Peak is 4–9 p.m. on both. See rate plans explained.
The 9-year lock and the early-adopter bonus
- Lock: customers who enroll during the first five years get a 9-year schedule of hourly export values, from the avoided-cost values adopted as of Jan 1 of the year they connect (OP 1(a)). SCE publishes these by vintage (NBT23 to NBT26) (SCE export pricing); SDG&E counts the 9 years from permission to operate (SDG&E).
- Bonus (ACC Plus): SCE residential customers got an extra $0.040 per kWh in year one ($0.093 for low-income customers); it drops by 20% of that each year for later sign-ups. SDG&E customers get $0 (OP 1(b)). SCE describes it as about $0.04 for customers who enroll before 2028.
- Selling the house: if you move within 9 years, the buyer gets no lock and no bonus (a spouse or domestic partner is the exception) (OP 1(i)).
Charges solar can't avoid
- Non-bypassable charges (public purpose programs, nuclear decommissioning, the Wildfire Fund charge and others) apply to every kWh you import (CPUC).
- The Base Services Charge: $24.15 a month at SCE since Nov 2025, about $24 at SDG&E since Oct 2025 ($6 for CARE, about $12 for FERA). Solar credits can't pay it (SCE, SDG&E).
Did the courts change anything?
No. After the California Supreme Court sent the case back in 2025, the Court of Appeal upheld the net billing decision again on Mar 9, 2026 (opinion).
What it means for you
- Size the system to your use, and plan a battery to move midday solar into the 4–9 p.m. peak.
- Be wary of quotes that value exports at retail prices: that's NEM 2.0 math.
- Already on NEM 1.0 or 2.0? You keep it for 20 years from interconnection; see keeping NEM 2.0.
Checked against official sources on Oct 1, 2026. Sources are linked in the text. Not legal, tax or financial advice.