NEM 3.0 State-by-State Net Metering Guide — What You'll Actually Earn Per State
Last updated: 2026-06-15
How Net Metering Actually Works
When your solar panels produce more electricity than your home needs at that moment, the surplus flows to the grid. Net metering determines what you get back for it.
Full retail net metering gives you a credit equal to the full retail rate you'd pay to buy that electricity. If your utility charges $0.15/kWh, you receive $0.15/kWh in credit.
Avoided cost / wholesale pricing pays you only what it costs the utility to generate or purchase that power on the open market — typically $0.03–$0.08/kWh. This is dramatically lower than retail.
Value-of-solar (VOS) or "value stack" programs attempt to price exported energy based on its actual grid value — time of day, location, grid stress. Results vary widely; some are better than retail, many are worse.
The gap between retail and avoided cost can be $0.10–$0.25/kWh. On 2,400 kWh exported per year, that's $240–$600 annually. Over a 25-year panel life, that's $6,000–$15,000 in difference — easily swamping the cost difference between competing solar bids.
The 10-State Comparison
For each state, we calculate:
- Annual export credit (2,400 kWh × export rate)
- Total annual solar value (self-consumed kWh savings + export credit)
- Estimated simple payback on a net-cost system of ~$15,500 (after 30% federal ITC on a $22,000 system)
1. California — NEM 3.0: The Cautionary Tale
Export rate: ~$0.03–$0.08/kWh (varies by time-of-day; avg. ~$0.05/kWh)
Retail rate: ~$0.32/kWh
Annual export credit: ~$120
Total annual solar value: ~$2,784 (self-consumption) + $120 = ~$2,904
Estimated payback: ~5.3 years
California's NEM 3.0, implemented April 2023, slashed export rates by roughly 75% compared to NEM 2.0. The CPUC's rationale was reducing the "cost shift" to non-solar customers. The effect on new solar buyers was immediate and severe.
The silver lining: California also approved a "bring a battery" incentive structure. Pairing storage with solar (typically 10–13.5 kWh of capacity) shifts your export to evening peak hours when avoided cost rates are higher. With a battery, effective export earnings can rise to ~$0.15–$0.24/kWh during peak demand windows.
Bottom line: In California, a battery is no longer optional — it's the economic foundation of a solar investment. Self-consumption is king.
2. Texas — No Statewide Rule, Wildly Variable Results
Export rate: $0.02–$0.10/kWh depending on utility
Retail rate: ~$0.14/kWh (varies; ERCOT market is volatile)
Annual export credit: $48–$240
Total annual solar value: ~$1,296 (self-consumption) + $48–$240 = ~$1,344–$1,536
Estimated payback: ~10–11.5 years
Texas has no statewide net metering mandate. Major IOUs are not required to offer it. Results depend entirely on who your utility is:
- Austin Energy: Offers buyback at ~$0.097/kWh for residential solar — one of the better deals in the state.
- CPS Energy (San Antonio): Offers net metering up to 20 kW at retail rate for systems interconnected before its 2023 rate restructure; newer customers receive lower compensation.
- Oncor / AEP territory: Retail providers set their own buyback rates; many offer $0.02–$0.05/kWh or flat monthly credits.
Texas solar economics run on self-consumption and backup power value (blackout risk), not export credits. The grid instability after Winter Storm Uri created genuine demand for battery backup that pure financial ROI doesn't capture.
3. Florida — Retail Rate Today, Watch the Legislature
Export rate: ~$0.13/kWh (retail net metering)
Retail rate: ~$0.13/kWh
Annual export credit: ~$312
Total annual solar value: ~$1,248 (self-consumption) + $312 = ~$1,560
Estimated payback: ~9.9 years
Florida still offers full retail net metering, but that status has been actively contested. HB 741 (2023) was signed into law, beginning a phase-down of retail net metering compensation over several years, with the trajectory leading toward avoided-cost rates by the late 2020s.
Customers who interconnect before policy changes take effect may be grandfathered under current rates for 10–20 years, depending on how the law is implemented. If you're considering solar in Florida, timing your interconnection matters.
4. North Carolina — Full Retail, Duke Energy's Footprint
Export rate: ~$0.13/kWh (retail)
Retail rate: ~$0.13/kWh
Annual export credit: ~$312
Total annual solar value: ~$1,248 + $312 = ~$1,560
Estimated payback: ~9.9 years
North Carolina mandates retail net metering through its REPS (Renewable Energy Portfolio Standard) framework. Duke Energy Progress and Duke Energy Carolinas both offer 1:1 net metering credits.
The state's solar-friendly environment (consistent sun, utility-scale solar investments) makes it a reliable market. Watch for Duke Energy rate case proceedings — the utility has sought modifications to net metering compensation in regulatory filings, and the outcome of pending cases could shift the calculus.
5. Arizona — Avoided Cost, Two Very Different Utilities
Export rate: ~$0.076/kWh (APS avoided cost) / varies at TEP
Retail rate: ~$0.13/kWh
Annual export credit: ~$182
Total annual solar value: ~$1,248 + $182 = ~$1,430
Estimated payback: ~10.8 years
Arizona is a split market. APS (Arizona Public Service) moved to avoided cost export rates after a 2017 ACC ruling, paying roughly $0.076/kWh for exports — well below retail. Tucson Electric Power (TEP) has offered slightly more favorable terms in some rate structures.
Arizona's sun resource is extraordinary (among the highest solar irradiance in the country), which partially compensates for the weaker export economics. An 8 kW system in Phoenix may produce 10,500–11,200 kWh/year, not 9,600 — shifting the math meaningfully toward self-consumption value.
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If you're evaluating systems in Arizona, the Enphase IQ Battery 5P is well-suited to the climate and integrates cleanly with most Arizona-installed microinverter systems.
6. Nevada — Recovery After the 2015 Rollback
Export rate: ~$0.09/kWh
Retail rate: ~$0.11/kWh
Annual export credit: ~$216
Total annual solar value: ~$1,056 + $216 = ~$1,272
Estimated payback: ~12.2 years
Nevada's 2015 net metering rollback became a national case study in how quickly policy can destroy a residential solar market. The state reversed course in 2017 and has been rebuilding trust since.
Current export rates are set annually by the PUCN and sit below retail but above pure avoided cost. The trajectory has been gradually more favorable to solar customers, though Nevada's below-average retail rates (~$0.11/kWh) mean the absolute dollar value of solar savings is lower than in high-rate states even at similar production levels.
7. New Jersey — Among the Best Net Metering Terms in the Country
Export rate: ~$0.17/kWh (retail)
Retail rate: ~$0.17/kWh
Annual export credit: ~$408
Total annual solar value: ~$1,632 + $408 = ~$2,040
Estimated payback: ~7.6 years
New Jersey's BPU (Board of Public Utilities) requires 1:1 retail net metering for residential solar. Combined with the state's Successor Solar Incentive (SuSI) program, which provides additional per-kWh incentive payments (administered through the SREC II/Administratively Determined Incentive tracks), New Jersey offers some of the strongest solar economics east of California's pre-2023 rules.
The high electricity rates (~$0.17/kWh average) mean every kilowatt-hour avoided or credited is worth more than in lower-rate states.
8. New York — Value Stack Rates, Better Than They Sound
Export rate: ~$0.10/kWh (VDER "value stack" average; varies by location and time)
Retail rate: ~$0.22/kWh (Con Ed territory; varies statewide)
Annual export credit: ~$240
Total annual solar value: ~$2,112 + $240 = ~$2,352
Estimated payback: ~6.6 years
New York moved from retail net metering to the VDER (Value of Distributed Energy Resources) tariff, which theoretically prices solar exports based on time-of-delivery, location capacity value, and environmental value. In practice, VDER rates for small residential systems average ~$0.08–$0.12/kWh — lower than Con Ed's retail rates but higher than pure avoided cost.
The key saving grace for New York: retail electricity is expensive. Even with below-retail export compensation, the self-consumption savings per kWh are substantial. The state's NY-Sun incentive program also adds an upfront value that improves initial economics.
9. Massachusetts — SMART Program Provides Guaranteed Rate
Export rate: ~$0.11–$0.15/kWh (SMART compensation rate, locked for 10 years)
Retail rate: ~$0.24/kWh
Annual export credit: ~$264–$360
Total annual solar value: ~$2,304 + $264–$360 = ~$2,568–$2,664
Estimated payback: ~5.8–6 years
Massachusetts runs the SMART (Solar Massachusetts Renewable Target) program, which pays a fixed "compensation rate" per kWh produced — not just exported. This changes the calculation entirely: you're paid for generation, not just what the grid sees.
Compensation rates are set by block and decline slightly as capacity fills. Earlier blocks received higher rates; current participants see rates in the $0.11–$0.15/kWh range depending on system size and utility territory. Rates are locked for 10 years from interconnection, providing exceptional revenue certainty.
Massachusetts's high retail rates (~$0.24/kWh) and the SMART production incentive combine to create one of the fastest payback environments in the country.
10. Colorado — Xcel's Avoided Cost Is Genuinely Low
Export rate: ~$0.04/kWh (Xcel Energy avoided cost)
Retail rate: ~$0.14/kWh
Annual export credit: ~$96
Total annual solar value: ~$1,344 + $96 = ~$1,440
Estimated payback: ~10.8 years
Xcel Energy serves most of Colorado's population and has moved to avoided cost pricing for solar exports. At ~$0.04/kWh, the export credit is the weakest on this list in absolute terms.
The math shifts if you're in a territory served by a rural electric co-op — some Colorado co-ops maintain more favorable net metering terms, though policies vary widely and are not always publicly posted. Black Hills Energy serves the southern part of the state and has different rate structures.
Colorado's strong solar irradiance partially offsets the weak export economics, but sizing strategy matters: don't overbuild in Xcel territory. A system sized to cover roughly 85–90% of your load (rather than 100%+) minimizes low-value exports.
Summary: Annual Export Credit by State
| State | Export Rate | Annual Export Credit | Self-Consumption Value | Total Annual Value | Est. Payback |
|---|---|---|---|---|---|
| Massachusetts | ~$0.13/kWh avg | ~$312 | ~$2,304 | ~$2,616 | ~5.9 yrs |
| California (NEM 3.0) | ~$0.05/kWh | ~$120 | ~$2,784 | ~$2,904 | ~5.3 yrs* |
| New York (VDER) | ~$0.10/kWh | ~$240 | ~$2,112 | ~$2,352 | ~6.6 yrs |
| New Jersey | ~$0.17/kWh | ~$408 | ~$1,632 | ~$2,040 | ~7.6 yrs |
| North Carolina | ~$0.13/kWh | ~$312 | ~$1,248 | ~$1,560 | ~9.9 yrs |
| Florida | ~$0.13/kWh | ~$312 | ~$1,248 | ~$1,560 | ~9.9 yrs |
| Arizona (APS) | ~$0.076/kWh | ~$182 | ~$1,248 | ~$1,430 | ~10.8 yrs |
| Colorado (Xcel) | ~$0.04/kWh | ~$96 | ~$1,344 | ~$1,440 | ~10.8 yrs |
| Texas (avg) | ~$0.05/kWh | ~$120 | ~$1,296 | ~$1,416 | ~10.9 yrs |
| Nevada | ~$0.09/kWh | ~$216 | ~$1,056 | ~$1,272 | ~12.2 yrs |
*California's payback appears fast because retail rates are very high (~$0.32/kWh), so self-consumption savings are large even though export rates collapsed.
What This Means Before You Buy
In high-export-rate states (New Jersey, North Carolina, Florida): Size your system to cover 100% or more of your annual load. You'll get full value for every kilowatt-hour whether you use it or not.
In low-export-rate states (California, Colorado, Texas, Arizona): Size conservatively. Every kilowatt-hour you export above self-consumption is worth dramatically less. Prioritize batteries to shift more production into self-consumption windows.
In value-stack / SMART states (New York, Massachusetts): Read your specific program documents carefully before signing. Rate lock periods, production vs. export compensation, and block availability all change the analysis significantly.
The SolarEdge Home Hub inverter offers the most flexibility for homeowners who want the option to add battery storage later — particularly relevant in states where today's export policy may not hold for the life of your system.
Affiliate Disclosure: This article may contain affiliate links. If you make a purchase through these links, we may earn a small commission at no extra cost to you. We only recommend products we genuinely believe in. This helps support our work and allows us to continue providing free content.
One Rule That Holds in Every State
Net metering policy changes. The federal 30% Investment Tax Credit does not. Whatever happens to export rates over the next decade, the ITC locks in immediate value at installation. Don't let uncertainty about future policy be a reason to delay — but do let it inform how you size and design your system today.
Get the Numbers for Your Home
Every home has a different load profile, roof orientation, and shade situation. A state's average export rate matters — but your specific utility, rate tariff, and system size matter more.
Want a personalized breakdown for your home? Drop your zip code and average monthly electric bill below and we'll send you a state-specific payback analysis with current utility rates.
Rates, incentive programs, and utility policies change frequently. Verify current terms directly with your utility or state energy office before making purchasing decisions. This article is for educational purposes and does not constitute financial advice.