NEM 3.0 Is Final: What California’s Court Ruling Means for Solar Buyers in 2026

Quick answer: NEM 3.0 is now settled law in California. In March 2026 the Court of Appeal upheld the CPUC’s Net Billing Tariff, and in June 2026 the California Supreme Court declined to review it. For PG&E, SCE and SDG&E customers applying in 2026, exported solar earns about 3.7 to 4.6 cents per kWh on average, roughly a tenth of what electricity costs to buy, so the value of solar now comes from using your own power, mostly through a battery.

For three years, a lot of California homeowners told us they were waiting for the courts to bring back NEM 2.0. That wait is over, and it ended the other way.

Key takeaways

• The legal fight is finished: no court is going to restore retail-rate export credits for new customers.
• Average export credits for 2025 and 2026 applicants are 3.9 cents (PG&E), 4.6 cents (SCE) and 3.7 cents (SDG&E) per kWh.
• Your export rates lock for 9 years based on the year you apply; a new set is expected for 2027 applicants.
• Legacy NEM 1.0 and 2.0 customers keep their terms for 20 years from interconnection, and those terms still transfer when the home is sold.
• Under NEM 3.0, a battery is what turns a 4-cent export into a 35-to-39-cent bill saving.

Is NEM 3.0 still being challenged in court?

No. The California Supreme Court closed the case on June 10, 2026, when it declined to hear a second appeal, leaving the Court of Appeal’s March 2026 decision in place (pv magazine USA).

The groups that sued (the Environmental Working Group, the Center for Biological Diversity and the Protect Our Communities Foundation) have said they will keep pushing for policy changes. Any change now has to come from the CPUC or the Legislature, not the courts.

How much does NEM 3.0 pay for exported solar in 2026?

On average, 3.7 to 4.6 cents per kWh, depending on your utility. Export credits come from the CPUC’s Avoided Cost Calculator and vary by hour, month and weekday versus weekend. Here are the averages for customers who apply in 2025 or 2026:

Export credit averages from the 2024 Avoided Cost Calculator update, as summarized by Energy Toolbase. ACC Plus values are approximate; see the ACC Plus section of our incentives guide.

Now compare that with what you pay. PG&E’s average bundled residential rate was 39.25 cents per kWh in March 2026, and SCE’s was 35.3 cents in January 2026. A kWh you export at noon earns about a tenth of what a kWh costs you at 7 pm. Those are averages: export values spike on late-summer evenings and drop near zero on spring middays, which is exactly why timing matters more than ever.

How long are NEM 3.0 export rates locked?

Nine years, set by the year you apply. Each utility publishes a “vintage” of hourly export prices; SCE, for example, labels the set for 2026 applicants NBT26. If you apply in 2026, you keep that vintage’s hourly prices for 9 years. After that, your exports are paid at whatever the current calculator says.

The Avoided Cost Calculator updates every two years, so a new vintage is expected for 2027 applicants. Nobody can tell you today whether it will be higher or lower. What you can control is the year you lock in. If you are already planning to install, waiting a few months does not buy you a better deal; it only adds another season of utility bills. You can download your utility’s hourly export prices from its Solar Billing Plan page (SCE export pricing).

Is solar still worth it under NEM 3.0?

Yes, when the system is designed around self-consumption instead of exports. Here is a simplified SCE example. Assume a system produces 10,000 kWh a year.

1. Solar only, half exported. 5,000 kWh you use yourself avoid roughly 35.3 cents each, about $1,765 a year. 5,000 kWh exported earn about 4.6 cents each, about $230. Total: about $1,995.
2. Add a battery that shifts 3,000 of those exported kWh into the evening. Each shifted kWh is now worth 35.3 cents instead of 4.6 cents, a gain of 30.7 cents. That adds about $920 a year, for a total of about $2,915.
3. The battery’s real return is the gap between those two numbers, and it grows every time rates rise. Peak-hour rates on time-of-use plans run well above the average rate used here, so the true gain is usually higher.

This example uses average rates and round numbers to show the shape of the math, not a quote for your home. Our solar payback guide runs full scenarios, and our battery cost guide covers what that battery costs installed.

What happens to NEM 1.0 and NEM 2.0 customers?

They keep their original terms for 20 years from the date their system was interconnected, then move to the Net Billing Tariff. PG&E moves them at their annual true-up and does not grant a second 20-year term (PG&E Solar Billing Plan FAQ); SDG&E notifies customers by email before the switch (SDG&E NEM page).

That clock is already running out for early adopters. A system interconnected in 2006 reaches its 20th year in 2026. The first NEM 2.0 systems (2016 and 2017) will start rolling off in the mid-2030s. If your legacy term ends soon, adding a battery before the switch is the single biggest thing you can do to protect your savings.

Selling a home with NEM 2.0 solar? The legacy terms stay with the system. In July 2025, the State Senate Energy Committee voted 9 to 4 to strip a provision from AB 942 that would have moved homes onto NEM 3.0 at sale (pv magazine). Confirm the interconnection date with the utility during escrow so the buyer knows how many years remain. Our home value guide covers how buyers price that in.

What else changed for solar customers in 2026?

Two things. First, the large utilities now bill a monthly Base Services Charge that every customer pays, solar or not: about $24.15 a month for standard customers, about $12 for FERA households and about $6 for CARE households (CPUC CARE/FERA page). Solar exports cannot offset it, so it sets a floor under your bill. Our fixed charge explainer has the details.

Second, on October 1, 2026, Governor Newsom signed SB 868, which allows plug-in balcony solar statewide. It is a useful option for renters and small loads, not a replacement for a rooftop system. See our balcony solar explainer.

Frequently asked questions

Is NEM 3.0 permanent? There is no sunset date. The courts upheld it in 2026, so any change would have to come from the CPUC or the Legislature.

Will NEM 2.0 come back? No. The California Supreme Court declined to review the case on June 10, 2026, ending the legal challenge.

How much does NEM 3.0 pay per kWh? For 2025 and 2026 applicants, the average export credit is about 3.9 cents per kWh on PG&E, 4.6 cents on SCE and 3.7 cents on SDG&E, with hourly values that vary by season and time of day.

Do I need a battery with NEM 3.0? Not by law, but financially it usually makes sense. A battery lets you use your own solar in the evening instead of exporting it for about 4 cents and buying power back for 35 cents or more.

Does NEM 3.0 apply to LADWP or SMUD customers? No. NEM 3.0 applies to PG&E, SCE and SDG&E. Municipal utilities such as LADWP and SMUD set their own rules.

What happens to my NEM 2.0 if I sell my house? It stays with the system for the rest of its 20-year term. A 2025 proposal to end that at sale was removed from AB 942 in committee.

What should I do next?

If you have been waiting on the courts, you can stop waiting. The question now is how to size solar and storage for your utility’s export prices. Ask any installer you talk to which export vintage their savings estimate uses.

You can get a quote in 2 minutes, compare our solar and battery systems, or find the areas we serve across California. For the full background on how the rules changed, see our NEM 2.0 vs NEM 3.0 comparison.