Net Metering vs Net Billing: Why Your Export Rate Changes Everything

Two models, very different math

Under full retail net metering (1:1), every kWh you export is credited at your full retail rate — the same rate you pay. Under net billing (sometimes called net metering 2.0 or NEM 3.0), exports are credited at a lower, often wholesale-style rate. In California, exports dropped from ~29¢/kWh to ~5¢/kWh under NEM 3.0. That one change can add 2–4 years to payback.

Which states use which model

Full retail 1:1: Massachusetts, New Jersey, New York, Maryland, Connecticut, Illinois, Minnesota, Oregon, Colorado, and about 25 other states. Net billing: California, Nevada, Arizona, Hawaii, South Carolina, Indiana. Avoided cost (wholesale, ~2–5¢): Alabama, Tennessee, Kentucky, Idaho, and parts of Texas. See the full net metering by state map on PVFig.

What to do in a net billing state

If exports pay little, the goal changes from "size the system to annual usage" to "use the power yourself." Charge your EV and run appliances mid-day, or add a battery to shift solar power to evening hours. In full-retail states, batteries rarely pay for themselves on economics alone — their value is backup power.

What is the difference between net metering and net billing?

Net metering credits exported solar kWh at your full retail rate (1:1). Net billing pays a lower, often wholesale-style rate for exports. Net metering is generally much better for solar payback.

Does my state have net metering or net billing?

About 28 states still offer full retail net metering. California, Nevada, Arizona, Hawaii, South Carolina, and Indiana use net billing. A few states pay avoided-cost rates. Check the PVFig net metering by state guide for the current classification.