Net Metering vs Net Billing: Which Is Right for Your Home
Written by HyreSolar Research Desk Primary-source research and fact checking
Quick answer
Net Metering vs Net Billing comes down to upfront cost, lifetime savings and how long you plan to stay in the home; here is each factor side by side.
You rarely choose between them: your utility’s tariff does. What changes is how a system should be designed. Under net metering, an exported kilowatt-hour is credited at the full retail rate, so it cancels one you buy later.
Under net billing, imports and exports are not netted: you pay retail for everything you draw and are credited at a lower rate reflecting the value of that power to the grid.
Net billing makes self-consumption and batteries worth more, and makes a proposal modeled on retail-rate exports wrong. "Buyback" is a generic label for any tariff that purchases exports at a set rate.
Cost side by side
Installed prices as other publishers state them, gross of incentives. Each range is the median published low to the median published high across at least 12 dated sources, retrieved October 21–22, 2026; the source rows sit on the linked cost page.
| Option | Published range | Sources |
|---|---|---|
| Solar only: typical installed system | $22,100–$27,500 | 14 dated |
| Solar plus battery | $28,000–$46,000 | 13 dated |
| Adding a battery to existing solar | $10,000–$18,000 | 12 dated |
No 30% federal credit is subtracted: Section 25D ended for expenditures after December 31, 2025.
Net metering vs net billing on the questions that set your bill
| Net energy metering | Net billing | |
|---|---|---|
| Does the meter net? | Yes: exports offset imports | No: "Imports and exports will be calculated based on no netting" (CPUC D.22-12-056) |
| What exports earn | The retail rate, "including generation, distribution, and transmission components" | "A rate reflecting the value of this generation to the grid" |
| What imports cost | Your retail rate | Your retail rate |
| Does the export rate vary by hour? | No need: it equals retail | Yes, where set from hourly avoided-cost values (California) |
| Value of midday exports | Full value against evening use | Low: midday is when solar power is worth least to the grid |
| Battery economics | Adds little: the grid acts as a full-price store | Stronger: storing midday output avoids a low export rate and a high import rate |
| Best system design | Size to annual use | Size closer to daytime use; consider storage; shift loads to solar hours |
Definitions: CPUC, Customer-Sited Renewable Energy Generation. Mechanics: CPUC Decision 22-12-056.
A worked transition: California, 2022 to 2023
The CPUC adopted Decision 22-12-056 on December 15, 2022. The successor tariff applied to new interconnection applicants from April 15, 2023, and the earlier tariffs are "closed to new enrollments."
Three things changed at once: export credit moved from retail to hourly avoided-cost values averaged by month (with separate weekday and weekend values), netting stopped, and new customers moved onto import rates with "high differentials between winter off-peak and summer on-peak rates."
The decision states its own design target: a nine-year payback for residential stand-alone solar. That is a figure you can test any California proposal against. Our NEM 3.0 study measures what happened next.
A temporary adder softened the change. First-year residential adders were $0.022/kWh at one utility, $0.040 at another and zero at the third ($0.090 and $0.093 for qualifying low-income customers at the first two).
The adder falls by 20% a year for new enrollees and exists only in the tariff’s first five years. Verify the current value with the regulator rather than from a sales proposal.
Savings over 25 years
Under net metering, savings track total production: every kilowatt-hour offsets one at retail, so a system sized to annual use can push the bill toward the fixed charges your utility still levies (see the fixed charge lookup).
Under net billing, savings track how much of your production you use yourself. Exported midday power earns little and evening power is bought at retail, often a peak rate.
That is why a battery, which looks marginal under net metering, can carry its own case under net billing.
Run your own tariff through the net billing calculator; it shows the gap between import and export rates and the most a battery can recover.
Policy direction matters for a 25-year asset. The regulator’s argument is that retail-rate credit shifts fixed network costs to customers without solar; the counter-argument is that avoided-cost methods understate distributed solar’s value. We do not adjudicate it.
In the states that have acted, the direction has been toward paying less for exports. What happens to a system already installed when rules change is covered in if net metering ends.
Which design to choose if…
- 1Your utility still offers retail net metering to new customers
A solar-only system sized to annual use is usually the efficient choice; storage is for backup, not savings.
- 2Your utility uses net billing or a buyback rate
Size toward daytime use, price a battery, and move flexible loads (EV charging, water heating) into solar hours.
- 3You cannot tell which you are on
Ask your utility three things: which tariff new solar customers get, whether imports and exports are netted, and what exports are credited at and whether it varies by hour.
- 4A proposal shows big savings
Ask which export rate it assumed. A projection built on retail-rate exports describes a different tariff. The proposal analyzer lists both assumptions.
When you are ready
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Keep learningQuestions
What is the difference between net metering and net billing?
What is a buyback rate?
Does solar still pay under net billing?
Should I add a battery under net billing?
Which states have moved off net metering?
Sources & retrieval dates
- CPUC, Customer-Sited Renewable Energy Generation (net energy metering) , Verbatim definitions of net energy metering and net billing; earlier tariffs closed to new enrollment; successor for applicants from April 15, 2023. Retrieved 22 October 2026.
- CPUC Decision 22-12-056, Revising Net Energy Metering Tariff and Subtariffs , Adopted December 15, 2022: no netting with annual true-up, hourly avoided-cost export values, nine-year payback target, adder amounts, 20% annual decay over five years. Retrieved 22 October 2026.
HyreSolar does not install, finance or sell solar. This page is general information, not tax, legal or financial advice; terms, prices and rules vary by state, utility and contract.