Net Metering by State: Which Markets Still Pay Retail Rate (2025)

Last updated: June 15, 2026

The Short Answer: Retail-Rate Net Metering Is Shrinking

If you're shopping for solar, net metering is the policy that determines how much money you get back for the extra electricity your panels send to the grid. The good news: most large solar states still offer it. The bad news: three of the five biggest markets have already cut or are actively phasing down the full retail-rate credit — and more are coming.

Here's what you need to know before you sign a contract.

What Net Metering Actually Means for Your Payback Period

Under true retail-rate net metering, every excess kWh you export to the grid offsets one kWh you'd otherwise buy from your utility at the full retail price — typically $0.13–$0.32/kWh depending on state. Your meter runs backward. At the end of the month, you pay (or receive credit for) the net difference.

Under avoided-cost or net billing schemes, utilities only credit you for what it costs them to generate or buy power wholesale — typically $0.03–$0.07/kWh. You might still sell power to the grid, but at 20–30 cents on the dollar compared to what retail net metering would pay.

That difference alone can extend your payback period by 2–5 years.

The 15 Largest Solar Markets at a Glance

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States That Have Cut Retail-Rate Credits: The Details

California — NEM 3.0 Changed Everything

California led the nation in solar adoption for two decades, partly because its retail-rate net metering was among the most generous in the country. That ended in April 2023 with NEM 3.0.

New residential solar customers now receive export credits that vary by time of day using avoided-cost rates. During peak afternoon hours — when panels produce the most — daytime export rates can be as low as $0.02–$0.05/kWh, versus the $0.28–$0.32/kWh retail rate customers pay to import power.

What this means: The payback period for a California solar-only system roughly doubled compared to NEM 2.0 assumptions. Battery storage is now essentially required to make the economics work — shift your solar energy to evening peak hours (when export rates reach $0.15–$0.25/kWh) instead of exporting at midday low rates.

If you're in California, pair your solar quote with a battery quote. Systems without storage are underperforming in this policy environment.

Florida — Retail Rate Now, Avoided Cost by 2029

Florida's HB 741, signed in 2023, created a glide path away from retail-rate net metering. Current customers and systems installed before the deadlines are grandfathered. New customers are still receiving retail-rate credits — but the credit rate steps down annually until it reaches avoided cost (estimated $0.03–$0.06/kWh) by January 1, 2029.

The implication: Systems installed in 2026 will see better export rates than systems installed in 2028. If you're on the fence in Florida, sooner is materially better than later. Run the numbers with your installer using the stepped-down rates, not current retail — don't assume today's rate holds for the life of your system.

Arizona — APS Net Billing Pays Below Retail

Arizona Public Service (APS), which serves most of metro Phoenix, moved new solar customers to a "net billing" tariff. Export credits are set below retail and vary by rate plan — generally in the $0.07–$0.10/kWh range. SRP (Salt River Project), serving the East Valley, has its own demand-charge structure that makes oversizing a solar system actively counterproductive.

If you're in Arizona, right-sizing your system is critical. Installing more panels than you can consume on-site makes little economic sense when exports are credited at a third of what you pay to import.

New York — Value Stack: Not Retail, Not Avoided Cost

New York's VDER (Value of Distributed Energy Resources) tariff replaced traditional net metering for most new customers. The "Value Stack" formula credits you based on time of delivery, location on the grid, capacity value, and environmental attributes. In practice, the total rate can land anywhere from $0.06 to $0.18/kWh depending on your utility territory and when your system produces.

This isn't the disaster California's NEM 3.0 was — the Value Stack often beats simple avoided-cost pricing — but it's complex, it's not the simple 1:1 retail credit, and it varies significantly by territory (Con Edison customers in NYC fare differently than NYSEG customers upstate).

Utah — Rocky Mountain Power Reduced Export Value

Utah's Rocky Mountain Power received PUC approval to reduce the export credit rate for solar customers. Credits are now calculated on a tiered basis below retail rate. The state's strong sun resources still make solar viable, but the economics are thinner than in neighboring Nevada, which restored full retail-rate net metering.

States Where Retail-Rate NEM Is Solid (For Now)

Nevada, New Jersey, Virginia, Massachusetts, Colorado, Maryland, and Illinois all currently offer full retail-rate net metering with no active phase-down proceedings as of mid-2025. Virginia's net metering is backed by the Virginia Clean Economy Act and is contractually protected for existing customers.

Massachusetts is unique: on top of standard retail-rate net metering, the SMART program provides additional fixed incentive payments per kWh generated (not just exported), independent of your net metering credit. This stacks favorably.

North Carolina offers retail-rate net metering, but Duke Energy has ongoing rate case filings that could alter terms. Watch this state — it's a candidate for policy change in the 2026–2027 timeframe.

How to Protect Your Payback Period in Any State

1. Lock in your interconnection date. When policies change, existing customers are almost always grandfathered on the old terms for 10–20 years. Going solar sooner protects you from the next NEM 3.0-style transition in your state.

2. Size your system for consumption, not maximum export. In states with below-retail export rates (CA, AZ, TX, UT), a system sized to cover 95% of your usage consistently outperforms an oversized system dumping excess power to the grid at pennies per kWh.

3. Consider battery storage proactively. Even in states with solid net metering today, storage future-proofs your investment. If your state cuts export rates after your system is installed, a battery lets you shift self-consumption instead of exporting.

4. Get your utility's actual current export rate in writing. Installer projections sometimes use outdated or optimistic export rate assumptions. Ask specifically: "What rate will I receive per exported kWh under your current interconnection tariff?"

If you want to model your actual payback before talking to an installer, the EnergySage Solar Calculator lets you input your utility, location, and usage to generate a realistic production-versus-consumption model with current policy rates baked in.

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