Net Metering Is Disappearing — Here's What Replaces It

The Policy That Built Rooftop Solar

Net metering is the reason residential solar took off. The concept is simple: when your panels produce more than you use, the excess flows to the grid and your meter literally spins backward. You get credited at the full retail rate.

It’s elegant. It’s easy to understand. And utilities hate it.

Why Utilities Are Fighting It

From a utility’s perspective, net metering customers are getting a deal that doesn’t reflect costs. The argument goes like this:

1. You still need the grid at night and on cloudy days
2. Maintaining that grid costs money
3. Net metering lets you avoid paying your share of grid costs
4. Non-solar customers subsidize you

There’s some truth here, though utilities tend to overstate the problem. The actual cost shift is debated, with studies landing anywhere from negligible to meaningful depending on who funded the research.

What’s Replacing Net Metering

Net Billing (California’s NEM 3.0)

Instead of retail credit, you get paid the “avoided cost” rate for exports — typically 5-8 cents/kWh vs. 30+ cents retail. This dramatically changes the economics and pushes toward batteries.

Time-of-Use Export Rates

Some utilities pay different rates depending on when you export. Afternoon solar gets less (everyone’s exporting then), evening gets more. This also favors battery storage.

Buy-All, Sell-All

You buy all your power at retail and sell all your generation at wholesale. Almost always worse for homeowners.

What This Means for You

If you’re considering solar, your local net metering policy is the single most important factor in your financial return. Before you get quotes, find out:

1. Does your utility offer net metering?
2. Is it being phased out? (Grandfathering matters)
3. What’s the export credit rate?
4. Are there system size caps?

The window for favorable net metering is closing in many states. That’s not a sales tactic — it’s just policy reality.