Net Billing vs. Net Metering in California: What the CPUC’s NEM 3.0 Decision Changed

Net metering credits the solar you export at the same retail rates you pay for electricity. Net billing credits it at hourly values based on what the grid would otherwise pay for that energy, which are usually much lower. California switched new solar customers from the first to the second in the CPUC’s NEM 3.0 decision, Decision 22-12-056, adopted December 15, 2022, for interconnection applications filed on or after April 15, 2023 with PG&E, SCE and SDG&E.

If you are not sure which plan your account is on, start with how NEM 2.0 and NEM 3.0 compare.

This page sorts out the names, lays out the CPUC’s own side-by-side, and explains what the decision adopted, what an earlier proposal would have done that didn’t survive, and what it left alone.

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Four names, two systems

The CPUC says the utilities refer to the net billing tariff as the Solar Billing Plan. PG&E and SCE both use that name on their sites, so a customer on the Solar Billing Plan is on what everyone else calls NEM 3.0.

The CPUC’s side-by-side

Under all three tariffs, solar used at home first serves the home and cuts what you buy. The differences are in how exports are credited, which charges apply, and how often you pay. This table follows the CPUC’s own comparison.

What Decision 22-12-056 adopted

Avoided-cost export credits. Exports are credited at values from the CPUC’s Avoided Cost Calculator. The decision has the utilities publish average monthly values for each hour, separated into weekdays and weekends. The CPUC says those values are usually lower than retail rates but can rise above them on late summer evenings. See the 2026 export values by hour.

A temporary export bonus. The decision added an ACC Plus adder for residential customers of PG&E and SCE, designed to target a nine-year simple payback. The starting amounts were $0.022 per kWh at PG&E and $0.040 at SCE for non-CARE customers, and $0.090 and $0.093 for CARE customers. SDG&E customers got none, because the CPUC’s modeling showed paybacks under nine years there without it. The adder falls 20 percent at the end of each calendar year and ends after five years; customers lock in their amount for nine years.

Electrification rates. New customers take a time-of-use rate with a wide gap between peak and off-peak prices. The decision named E-ELEC for PG&E, EV-TOU-5 for SDG&E and TOU-D-PRIME for SCE.

A nine-year legacy period tied to the customer. The tariff’s terms, other than the import rate, hold for nine years from interconnection. The decision says the legacy period belongs to the customer who originally caused the system to be installed, not to the system: a later owner of the home doesn’t get one, unless they are that customer’s spouse or domestic partner.

Monthly billing. The CPUC says bills are due monthly under net billing so customers aren’t surprised by a large annual bill, with surplus credits rolling forward to the annual true-up. Non-bypassable charges apply to all imports.

Help for lower-income customers. The CPUC’s announcement said low-income customers, disadvantaged communities and California Indian Country residents receive more than double the extra bill credits, alongside $630 million in state funding the Legislature set aside for upfront low-income incentives.

What the 2021 proposal would have done, and didn’t

The first draft, a proposed decision from December 13, 2021, looked different. According to the CPUC’s fact sheet on it, it would have charged residential solar customers a monthly Grid Participation Charge of $8 per kilowatt, used a Market Transition Credit locked for 10 years, and moved existing NEM 1.0 and NEM 2.0 customers, except low-income customers, to the new tariff after 15 years of interconnection.

The final decision dropped all three. The CPUC’s December 2022 announcement said the adopted decision does not include any charges specific to solar customers and has no impact on existing rooftop solar customers. That is why NEM 2.0 accounts still run for 20 years; see when NEM 2.0 expires.

After the decision

The decision was challenged in court, and on March 9, 2026 the Court of Appeal affirmed it after the California Supreme Court had sent the case back on the standard of review. The CPUC’s own review is built in: the decision calls for three years of data after full implementation and a draft evaluation within five years, and the CPUC lists Decision 23-11-068 as planning that evaluation. The NEM 3.0 lawsuit page has the court history, and the NEM 3.0 timeline has the remaining deadlines.

Which one applies to your account

If PG&E, SCE or SDG&E serves you and your solar application went in on or after April 15, 2023, you are on net billing. If it went in earlier, you are on NEM 1.0 or 2.0 until your 20-year period ends or an expansion moves you. The CPUC’s tariff doesn’t cover customers of city-owned utilities, and the smaller investor-owned utilities have their own tariffs. Your bill names the program; if it disagrees with what you were told, go with the bill.