LADWP Net Metering: How Solar Credits Work in Los Angeles, and Why NEM 3.0 Does Not Apply

NEM 3.0 does not apply to LADWP. The CPUC’s net billing rules cover PG&E, SCE and SDG&E, while the Los Angeles Department of Water and Power runs its own net energy metering rider. Under it, if your solar sends LADWP more energy than you use in a billing period, the excess is credited at your rate schedule’s energy price, and the credit carries forward to later bills.

This guide covers why the state’s NEM 3.0 rules stop at the city line, how LADWP’s rider bills you, what happens to leftover credit, who qualifies, how leases and rentals are treated, and the steps to get connected.

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Does NEM 3.0 apply to LADWP?

No. NEM 3.0 is the informal name for the net billing tariff the CPUC adopted for the utilities it regulates. The CPUC’s own net billing page says it applies in the territories of the large investor-owned utilities: PG&E, SCE and SDG&E. LADWP is a city department, and its solar billing rules come from the city’s rate ordinance and LADWP’s Net Energy Metering Service Rider.

State law draws the same line. Public Utilities Code Section 2827, the net metering statute, was amended again this year by AB 2175 (Chapter 94, Statutes of 2026). Its definition of an electric utility says the section does not apply to a local publicly owned electric utility that serves more than 750,000 customers and also conveys water to its customers. That carve-out fits LADWP, the city’s combined water and power utility. So headlines about NEM 3.0 export rates, the export bonus or the April 2023 cutoff are about other utilities’ customers.

How LADWP net metering bills you

LADWP’s rider has four billing rules. They work on the billing period as a whole, not hour by hour.

1. If LADWP supplied at least as much energy as your system generated over the billing period, you pay for the net energy at your current rate.
2. If your system generated more than LADWP supplied, you still pay all monthly charges except energy-related or per-kWh charges, and LADWP calculates a credit for the energy it received using your rate schedule’s energy pricing.
3. A credit balance is applied to each later bill, except taxes and minimum charges, until it is used up. If a balance remains when you end service, it is set to zero and you are owed nothing more for the excess.
4. Credit applies only to the bill for the meter that measured the excess energy.

The guidelines add that customers may choose the standard rate or a time-of-use rate. LADWP does not publish a separate export price; the credit follows your own schedule’s energy pricing. Current R-1A and R-1B prices are in LADWP rates for 2026, and how often the bill arrives is covered in how often LADWP bills.

LADWP net metering compared with NEM 3.0

LADWP column from its NEM rider and guidelines; NEM 3.0 column from the CPUC’s net billing page and Decision 22-12-056.

The practical difference is the value of an exported kWh. Under NEM 3.0 a spring midday export can earn less than a cent; under LADWP’s rider it earns the energy price you would otherwise pay. What NEM 3.0 customers earn hour by hour is in NEM 3.0 export rates.

The trade-off is the leftover credit. There is no annual cash payment for surplus in the rider, and any balance left when you close the account is gone. A system sized far beyond your use builds credit you may never spend, so size it to your household’s consumption.

Who can get LADWP net metering

LADWP’s guidelines limit net metering to solar systems of 1 MW or less; larger systems go on a parallel generation rate, Schedule CG-2 or CG-3. The customer must own and operate a permanent system on the premises that runs in parallel with LADWP’s grid and offsets part or all of the customer’s own use. The energy must be used on site or delivered to LADWP for bill credit; it cannot be sold to anyone else. The rider is available on Schedules R-1, A-1, A-2 and A-3, and LADWP urges customers on any rate other than R-1A to ask for a rate analysis before installing, because solar can change the rate that applies.

Leases are allowed; energy sales are not

A homeowner or long-term tenant can lease a system and still use net metering if the lease runs at least 10 years, gives the lessee an option to own the system by the end, and does not base payments on the energy the system produces. The guidelines say production-based payments could be read as a sale of electricity, and that the sale of energy by anyone other than LADWP is prohibited. The lessor and lessee sign a Solar Lease Compliance Form, and LADWP can audit the lease. A contract that charges you per kWh produced does not fit these rules, so ask LADWP before you sign one.

Renters

A tenant can qualify if an electrically separate solar system is connected to the tenant’s own meter. The rental agreement must give the tenant all rights to the system’s energy, and rent cannot be tied to the system’s production or to LADWP’s per-kWh price. Tenant and owner file a Tenant Customer Compliance Form.

Getting connected: LADWP’s steps

LADWP has discontinued its old Solar Incentive Program, so net metering starts with an online application at ladwp.com/nem for an interconnection work request number. Projects under 10 kW that need no service upgrade and have no battery backup may qualify for a fast-tracked process. The system then needs three inspections: the city Department of Building and Safety permit inspection, an LADWP electric service representative inspection for systems of 10 kW or more, and an LADWP solar inspection once Building and Safety releases the project. The system may stay locked until the inspections are done, any required agreement is signed and a net meter is installed.

Systems or batteries over 10 kW need an interconnection agreement: a short form up to 30 kW and a long form above that. The guidelines say every grid-connected energy storage system needs review and inspection by an LADWP distribution engineer and electric service representative, so a battery adds time.

Batteries, SGIP and other LADWP solar programs

Because excess solar earns your own energy price rather than a low avoided-cost value, the bill case for a battery is weaker in Los Angeles than under NEM 3.0. For most LADWP homes a battery is a backup decision first; the trade-offs are in solar battery backup and storage in California.

LADWP administers its own share of the state’s SGIP equity budget for income-qualified households. The 2026 SGIP Handbook allocates it $32.4 million, and the program tracker showed it waitlisted on September 23, 2026; details are on the SGIP status page.

LADWP also runs programs that are not net metering; the full list is in LADWP’s solar programs. Its Solar Rooftops program puts utility-owned panels on eligible homes. Its Virtual Net Energy Metering pilot buys the output of solar on multifamily sites at 14.5 cents per kWh for 10 to 500 kW projects and 14.0 cents above that, and requires at least 40 percent of the proceeds to go to tenants; LADWP listed 4.14 MW of its 5 MW still available as of January 5, 2026. The state-regulated version of multi-meter solar is explained in virtual net metering in California.