Why Your Solar Savings Are Shrinking (and What Net Metering Changes Mean for You)

Most solar guides quietly skip the single biggest variable in your actual savings: how much your utility pays you for the power your panels send to the grid.

That number is called net metering, and in 2026 it is changing fast. If you have been assuming "I install panels, I get credited at my full electricity rate, done," you may be underestimating the risk. Here is what is actually happening, why it matters, and what you can do about it.

What net metering is (and isn't)

Net metering is the billing arrangement that credits you for the excess solar power your panels export to the grid. On a sunny weekday afternoon, when your roof is making more than your home is using, that surplus flows out. The grid acts like a free battery: you bank credits at midday and spend them at night.

The key fact most people miss: net metering is a policy, not a permanent right. The rate your utility pays you for exports can change, and when it does, the economics of the exact same panels on the exact same roof change too. Nothing about your hardware moves. Only the price the grid pays for your surplus moves.

The two types of net metering (and why the difference is huge)

Every net metering program in the US falls into one of two buckets, and which one you are in determines how safe your savings are.

Statutory net metering. The rules are written into state law by the legislature. To change them, a new bill has to pass, with political consensus, a public process, and years of effort. These programs are the most stable. States like Nevada (after the 2017 AB 405 restoration), New Jersey, Oregon, and Massachusetts sit here.

Regulatory net metering. The rules are set by a utility commission (PUC, PSC, etc.) through an administrative rate case. To change them, the commission opens a docket, hears testimony, and votes. That can happen in 12 to 18 months with far less public visibility than a legislative fight.

This is the difference that separates a stable 25-year investment from one that can shift under you. A buyer in New Jersey, where net metering is statutory, has legislative protection. A buyer in Arizona under APS, where the net billing program was set by a regulatory proceeding, does not. The commission can change it again.

Real examples: what happens when the rules move

California. Under NEM 2.0, exported solar earned a credit close to the retail rate for that hour. The CPUC opened a successor tariff proceeding and, in April 2023, NEM 3.0 took effect, cutting export credits for new customers by roughly 75%. Existing NEM 1.0 and 2.0 customers were grandfathered for 20 years. New buyers got the new lower rate immediately. The policy changed; who won and who lost was determined purely by timing.

Indiana. In 2022, the state removed its retail-rate net metering mandate. Utilities then shifted to crediting exports at avoided-cost rates of roughly 3 to 6 cents per kWh instead of retail rates of 14 to 16 cents. Existing owners were grandfathered through 2032; anyone new after the change gets the lower rate.

Nevada (the reversal). In 2015 the PUC cut credits to avoided-cost rates, installations collapsed, and installers left the state. The public backlash was severe enough that the 2017 legislature restored retail-rate net metering by statute. Lesson: regulatory cuts can be reversed, but it takes a crisis, and you do not want to be the buyer who installed during the gap.

The pattern is consistent: over time, net metering compensation tends to get worse, not better. Successor programs usually pay less for exports than the plans they replace.

Why a battery suddenly matters a lot more

When your utility pays less for exports, the value of using your own power on-site jumps. That is where a battery changes the math.

Here is a real worked example from a typical 8 kW Southern California system under 2026 SCE rates:

| Scenario | Modeled annual savings | |---|---| | NEM 2.0 (legacy) | about $4,185 | | NEM 3.0, solar only | about $1,940 | | NEM 3.0, solar + one Powerwall 3 | about $3,250 |

NEM 3.0 cut solar-only savings by more than half. Add a single battery, and most of that loss comes back. The battery stores midday surplus (worth a nickel when exported) and discharges it in the 4 to 9 p.m. peak window, where SCE power can cost 48 to 58 cents per kWh. Each shifted kilowatt-hour stops earning about 5 cents and instead avoids about 40 cents, a roughly 35-cent-per-kWh swing.

This is why 70% of SoCal installs in 2025 included a battery. It is the market's direct response to NEM 3.0.

What is moving right now (2026 to 2027)

Based on the NC Clean Energy Technology Center's Q2 2026 "50 States of Solar" and recent state dockets, these are the states worth watching:

• Maryland. A new net metering program with lower compensation rates is expected, with the Public Service Commission required to have it in place by July 2027.
• Virginia. Dominion Energy is moving from net metering to "net billing," similar to California's NEM 3.0 shift, which raises the value of battery storage.
• Connecticut. Utilities are ordered to build successor programs, finalized by April 2028. Some form of net metering continues, but the export rate trend is down.
• Arizona. A court vacated a utility grid access charge, which helps existing owners keep more of what they produce. Fixed fees aimed at solar customers are the quiet enemy of payback.

If your state is on a list like this, the timing of when you install matters.

What this means for you (the practical part)

1. Do not assume your export rate is permanent. Find out whether your state's net metering is statutory or regulatory, and whether any successor program or rate case is pending.

2. The early bird tends to win. It is very unlikely that export values improve over time. Waiting to "see what happens" usually means missing the current, more generous plan and losing solar savings while you wait.

3. A battery's value is now tied to your export rate. The lower the rate your utility pays you, the more a battery is worth, because it shifts your power from low-value export to high-value peak offset.

4. The federal 30% credit is gone for 2026. The residential tax credit (Section 25D) is not available for systems placed in service after December 31, 2025. So your payback math in 2026 has to stand on your own savings, which makes the export-rate question even more important.

5. Get your actual numbers for your address, not a generic average. Your savings depend on your specific roof, your specific utility rate plan, and your specific export rate. A generic calculator that does not know your ZIP code and your rate schedule cannot tell you the real answer.

Your next step

If you are on the fence about solar, or you have been waiting for the rules to settle, the honest advice is this: the rules are not going to get better. The best move for most homeowners is to get on your current plan while it is still generous.

Before you commit to anything, you deserve to see the real number for your exact roof. A $19 satellite scan at https://solrscan.com reads your specific address and shows you your annual sunshine hours, how many panels actually fit, your recommended system size and installation cost, and your projected energy savings. No sales call, no roof visit, no "we will call you Tuesday."

Just the numbers for your home. Then you can make the decision on facts, not on a generic internet average.

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Sources: Solar.com "50 States of Solar" (NC Clean Energy Technology Center, Q2 2026); Solar Price List, "Solar Net Metering Policy Risk 2026"; OC Solar, "NEM 3.0 Battery Math: Real SoCal Numbers" (July 2026); TrueSolarCost, "Net Metering vs Net Billing." Figures are modeled illustrations based on published rates, not quotes; your results depend on your specific usage, rate plan, and system design.