Net Metering and Residential Solar Credits in Fresno
If you’re new to solar or just trying to wrap your head around how solar credits work, this guide is for you. Net metering has gone through several changes in California, and the most recent version, NEM 3.0, or net billing, has shifted the strategy on how homeowners save money.
Essentially, power sent to the grid now has less value than it did with previous net metering programs, so your focus should be on using the power you generate. Batteries are critical in making the most of your solar energy system.
When you want to make sure you are doing solar right, call the Fresno solar experts at Supreme Solar. We’ll explain how NEM 3.0 works and why batteries are essential to maximize solar value.
What Is Net Metering and How Do Solar Credits Work?
Net metering is a billing arrangement between you and your utility. When your solar system produces more energy than your home needs, that excess power is sent back to the grid. In return, you earn a credit on your bill. When your home needs more power than your panels can produce, such as at night or on cloudy days, you draw from the grid, and your credits help offset the cost.
The idea is to balance energy production and consumption over time. But how much your exported power is worth has changed dramatically over the years.
NEM 1.0: The One-for-One Golden Era
Under NEM 1.0, which launched California’s early solar boom, homeowners were credited dollar for dollar for excess energy sent back to the grid. If your utility rate was 30 cents per kilowatt hour and you exported power, you got a 30-cent credit. It was simple, generous, and made solar an easy financial decision.
This program offered a full retail rate credit, meaning your credits were equal in value to what the utility charged. This made it possible for many solar customers to eliminate their bill entirely. The only downside? It wasn’t designed for long-term utility sustainability, and it eventually closed to new applicants.
NEM 2.0: Time-of-Use Billing Arrives
NEM 2.0 introduced Time-of-Use (TOU) billing, where the value of solar credits changed depending on the time of day.
- During peak hours (typically 4 PM to 9 PM), energy was more valuable
- During the day (when solar production is high), the value of energy was lower
This system still allowed customers to offset most or all their usage with credits, but it was a little more complex to calculate. You had to consider when your system produced power and when your home used it. Still, many homeowners thrived under NEM 2.0, especially with larger systems or smart TOU management.
NEM 3.0 (Net Billing): Changes in Grid Sharing Value
Now we’ve entered NEM 3.0, also called net billing. This system takes a completely different approach. Instead of crediting you at retail or TOU rates, your solar exports are now valued based on something called the Avoided Cost Calculator (ACC).
This means every hour of every day throughout the year has its own rate, and in most cases, that rate is much lower than what you pay to buy power from the utility.
- PG&E, SCE, and SDG&E average export rates are typically 5 to 6 cents per kilowatt hour
- In rare cases, during critical demand windows in late August or early September, between 6 PM and 8 PM, export rates can spike as high as $2.00 per kilowatt hour
- But for most of the year, those rates stay in the single digits
In simple terms: if you send power to the grid, it’s now worth far less than what you pay to get power back. That’s why self-consumption through batteries is now essential to solar success.
Why Batteries Are a Must Under NEM 3.0
Under this new system, sending power back to the grid earns fewer credits. The real value comes from storing your excess solar energy during the day and using it at night when you’d otherwise be buying expensive utility power.
This is called self-consumption. Your solar system powers your home during the day. Any excess gets stored in your battery. Then when the sun goes down, your battery kicks in and continues powering your home.
Why is this better than exporting?
Because instead of selling your power for 5 or 6 cents and buying it back later for 35 to 45 cents, you’re keeping it on site. And the higher electricity rates go, the more valuable your self-consumption becomes.
Is Solar Still Worth It?
Absolutely. In fact, for many Fresno homeowners, NEM 3.0 with an appropriately sized battery is just as good, or even better, than NEM 1 or NEM 2.
Here’s why:
- Electricity rates are higher than ever in PG&E, SCE, and SDG&E territory
- Self-consumption means you’re offsetting 100 percent of your own usage
- Solar & Battery incentives like the 30 percent federal tax credit still apply, but just taken differently
- Backup power is now part of the equation, adding resilience to your home
So, while the rules have changed, the opportunity hasn’t gone away. It’s just evolved.
How Big Should My Battery Be?
Battery sizing varies by household usage, utility rate structure, and outage goals. The example below is a general planning guideline, not a substitute for a professional load calculation.
A great rule of thumb under NEM 3.0 is to size your battery 2.5 to 3 times larger than your solar system’s daily kilowatt hour production. For example, if your solar system produces 30 kilowatt hours a day, you want around 75 to 90 kilowatt hours of usable battery capacity over a 3-day cycle. This doesn’t all have to be in one battery. Many systems use 2, 3, or even 4 batteries to hit that number.
We cover this in more detail in our guide: How to Size Your Battery Correctly for NEM 3.0.
What About My TrueUp Bill?
Under net billing, your utility still tracks your energy usage and credits each month. However, it’s no longer on a 12-month cycle like under NEM 1 or 2.
- Each month, your export credits are calculated
- If you have excess credits, they roll into the next month
- If you owe a balance, you pay it, and the cycle resets
Because most NEM 3.0 customers are now storing and using their energy rather than exporting, TrueUp statements tend to be lower and simpler. But they still show:
- How much energy you consumed
- How much you exported
- The value of any credits you earned
- Any remaining balance or charges
This lets you track how well your battery strategy is working.
Do Exports Still Matter?
Yes, but they play a much smaller role than before.
There are still rare windows when export rates spike, especially during summer peaks in late August and September. If your battery is programmed to export during those windows, you can earn up to $2.00 per kilowatt hour, which is extremely valuable.
Some smart inverters can help manage this automatically. But for most homeowners, the best long-term strategy is still self-consumption.
Did I Miss the Opportunity?
Not at all. The strategy has changed, but the benefits are still strong.
In fact, with electricity rates in PG&E and SCE territories now reaching 40 to 50 cents per kilowatt hour, your savings with solar and batteries could be even greater than what earlier adopters saw under NEM 1 or 2.
- NEM 1 users saved by exporting power
- NEM 3 users save by storing and using their own power
Both strategies work. The new system just demands smarter planning and better design.
Net Metering: The Future of Solar in Fresno with Supreme Solar & Electric
We’re just getting started in this new era of energy independence. With smart battery systems, cutting-edge inverters, and financing programs tailored for NEM 3.0, homeowners are taking back control of their power bills.
Our team at Supreme Solar and Electric is helping families across California, from Fresno to the Coachella Valley, design solar-plus-battery systems that eliminate their utility bills and give them peace of mind.
Ready to get started? Let’s talk about your goals, look at your electric bill, and help you build a system that works under NEM 3.0. Choose Supreme Solar & Electric for expert solar installation in Fresno.