The NEM 2.0 Deadline Has Passed: What Solar + Battery Now Costs LA, San Diego & Orange County Homeowners

If you were holding out hope of grandfathering a new solar system into California's old, more generous net metering rules, that window is now closed. April 15, 2026 was the final deadline for systems to achieve Permission to Operate under NEM 2.0. Every new solar installation across Los Angeles, San Diego, and Orange County now falls under NEM 3.0. Here's what that actually means for what your system will cost you, and save you, going forward.

What Was the NEM 2.0 Deadline, Exactly?

NEM 3.0 technically took effect back in April 2023, but California gave homeowners who had already applied for interconnection a three-year grace period to still qualify under the older NEM 2.0 terms, provided their system achieved Permission to Operate, meaning it was fully installed, inspected, and approved to run, by April 15, 2026. That date has now passed. Even applications submitted years ago no longer qualify if the system wasn't fully operational by the deadline. There is no remaining path to NEM 2.0 for a new system in Southern California Edison, San Diego Gas & Electric, or Pacific Gas & Electric territory, which together cover the large majority of the greater LA, San Diego, and Orange County solar market.

What Changes Under NEM 3.0

The core difference is how much your utility pays you for power your solar system exports to the grid. Under NEM 2.0, exported power was credited close to full retail value, typically $0.30 to $0.40 per kilowatt-hour. Under NEM 3.0, export credits are based on the utility's avoided cost instead, and they're both much lower and time-dependent:

• Midday export credits (when solar production is highest): roughly $0.05 to $0.08 per kilowatt-hour
• Evening export credits (when grid demand is highest): roughly $0.18 to $0.24 per kilowatt-hour
• 576 distinct rate combinations in total, varying by month, hour, and weekday versus weekend, with the highest values typically on late-summer evenings

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Overall, that's roughly a 75% reduction in export value compared to NEM 2.0. For a system sized and financed around the old export math, that's a meaningful shift in payback timeline if the system doesn't also include storage.

This Is Now Permanent, Not a Temporary Rule

Advocacy groups had petitioned the California Supreme Court to review NEM 3.0's structure. The Court declined that review in June 2026, which closes off the most likely remaining legal avenue for a reversal. For homeowners in LA, San Diego, and Orange County evaluating solar now, NEM 3.0 should be treated as the permanent framework going forward, not a rule likely to change back.

Why Battery Storage Is Now Close to Essential

With midday export credits this low, sending excess solar production straight to the grid barely registers on your bill anymore. A home battery changes that math by letting you store your system's peak midday production and use it yourself in the evening, when grid electricity is most expensive and export credits, if you were still exporting, would actually be highest. For most new solar customers across LA, San Diego, and Orange County, pairing panels with a battery isn't an upsell so much as the piece of the system that makes the economics resemble what solar-only used to deliver under NEM 2.0.

What This Means If You're Considering Solar Now

• Size your system around your own household usage and battery storage capacity, not around maximizing export volume, since export credits no longer reward oversizing the way NEM 2.0 did.
• Get a realistic, time-of-use-based savings estimate rather than a generic national solar calculator, since NEM 3.0's rate structure varies by hour and month.
• Understand that the federal Residential Clean Energy Credit (Section 25D) also ended for systems placed in service after December 31, 2025, which is a separate change from NEM 3.0 but affects the same purchase decision.
• Ask directly how a proposed system design performs specifically under NEM 3.0's export schedule, not under outdated NEM 2.0 assumptions some quotes may still be using.

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FAQ

Can I still qualify for NEM 2.0 if I install solar now?

No. The final deadline to achieve Permission to Operate under NEM 2.0 grandfathering was April 15, 2026. All new systems now fall under NEM 3.0, regardless of when the paperwork was originally filed.

How much less will I earn for exported solar power under NEM 3.0?

Roughly 75% less than under NEM 2.0. Export credits now range from about $0.05 to $0.08 per kilowatt-hour midday up to about $0.18 to $0.24 per kilowatt-hour in the evening, versus NEM 2.0's near-retail $0.30 to $0.40 per kilowatt-hour.

Is there any chance NEM 3.0 gets overturned?

It's unlikely at this point. The California Supreme Court declined to review challenges to NEM 3.0 in June 2026, closing off the most direct legal path to a reversal.

Do I need a battery to make solar worth it under NEM 3.0?

Not strictly, but it substantially improves the payback math by letting you use your own midday solar production in the evening rather than exporting it for a low credit.

Ready to talk it through? Call Empower Home Services at 800-306-6953 or visit empoweryourhome.com to schedule a free consultation.