Thinking about solar in San Diego but hearing mixed messages about NEM 3.0? You are not alone. Many homeowners and buyers are trying to figure out if solar still pencils out and how batteries fit in. In this guide, you will learn how SDG&E credits exported solar under California’s Net Billing Tariff, why that matters for payback, and how smart design and storage can improve savings. Let’s dive in.
What changed under NEM 3.0
California’s successor to retail net metering, often called NEM 3.0, replaced the old 1-to-1 retail credit for new interconnections. Under the Net Billing Tariff, exports are credited at a lower, time-varying value tied to avoided market costs. That means the energy you send to the grid typically earns less than what you pay to buy from the grid.
If you already had solar under earlier NEM rules, you are generally grandfathered for a defined period, commonly 20 years from interconnection. New systems or additions after the transition follow the Net Billing Tariff. For exact eligibility and dates, check current SDG&E and CPUC guidance.
How SDG&E credits exports
Under SDG&E’s Net Billing Tariff, exported energy is measured by the hour and credited as a dollar amount based on a published export value. This is different from subtracting kilowatt-hours from your usage at the retail price. The export value changes by hour and season and is often much lower during midday when solar output is high.
Retail bills still use time-of-use pricing for what you buy. The highest retail period does not automatically mean the highest export credit. Credits may carry month to month with a final annual true-up based on export values rather than full retail netting. SDG&E requires interval metering and standard interconnection equipment for NBT customers.
Why this reshapes payback
Under older retail net metering, oversizing a system could make sense because extra production offset your bill at the full retail rate. Under NEM 3.0, exporting a lot of surplus energy at lower values can stretch payback. The best returns now usually come from maximizing self-consumption and shifting energy into high retail TOU periods.
Designing around your real usage profile matters more than ever. Homes that can use more solar in the daytime or shift loads strategically tend to save more. Batteries can help by storing low-value midday energy and discharging when retail prices are higher.
Storage’s role today
A battery paired with solar can improve returns by increasing self-consumption and reducing purchases during expensive evening periods. It can also provide resiliency during outages, which many homeowners value even if it does not shorten payback. Financially, a battery works when the avoided retail cost during discharge exceeds the export credit you would have received, after accounting for round-trip losses and battery cost.
Not every battery improves payback. If the battery is too small to cover your key evening hours or too expensive relative to the rate spread, savings can fall short. Modeling your household’s load and SDG&E’s hourly values is essential before you buy.
Design strategies for San Diego
- Size to daytime usage. Aim for a system that matches your typical daytime loads instead of oversizing to export.
- Shift flexible loads into the sun. Run dishwashers, laundry, and pool pumps midday when your array is producing.
- Charge EVs during solar hours. Midday charging raises self-consumption and can reduce the battery size you need.
- Consider a right-sized battery. Target the evening hours you want to cover most, then size capacity to match those kilowatt-hours.
- Use smart controls. Pre-cool your home in the afternoon and use timers for appliances to reduce on-peak purchases.
- Pick the right TOU plan. If you have options, choose a plan that aligns with your solar output and discharge strategy.
Model your savings
Start with your household’s hourly usage and a realistic production estimate. A simple framework helps you see the impact of array sizing, batteries, and load shifting under NEM 3.0.
- Gather 12 months of interval usage data from your SDG&E account. This shows when you use energy, not just how much.
- Estimate production with a trusted tool such as NREL’s PVWatts or your installer’s model. Include panel orientation and shading.
- Apply SDG&E hourly retail TOU prices and hourly export values to your profiles. Value exports at the export credit and avoided purchases at retail.
- Add a battery scenario. Include usable capacity, round-trip efficiency, degradation, and a control strategy that charges midday and discharges during peak.
- Include incentives. The federal residential Investment Tax Credit has recently been 30 percent for many systems. Confirm current eligibility and percentage with IRS guidance, and check DSIRE or local programs for updates.
- Run a multi-year cashflow. Compare payback and lifetime savings across scenarios: solar-only, solar plus storage, and smaller solar plus storage.
Home solar checklist
- Request your last 12 months of interval usage from SDG&E.
- Ask installers to model hourly exports using SDG&E’s export credits.
- Compare designs: solar-only vs solar plus battery vs smaller solar plus battery.
- Confirm interconnection, metering, and any export-limiting device requirements.
- Review assumptions for rate escalation, export values, battery efficiency, and warranties.
Buying or selling with solar
If you are evaluating a home with solar, ask for the interconnection date and billing status to understand whether it is on an older NEM tariff or NEM 3.0. Review recent utility bills to see how the system performs with that household’s usage. Your savings will depend on your own load profile and rate choice.
If the home includes a battery, confirm its capacity, age, warranty, and whether it is configured to charge from solar and discharge during peak periods. For leased or power purchase agreement systems, review contract terms and transfer steps. When in doubt, ask SDG&E for clarity on interconnection and billing under the Net Billing Tariff.
Mistakes to avoid
- Oversizing the array without a plan for self-consumption or storage.
- Ignoring hourly exports and assuming retail credits.
- Skipping interval data and modeling, which leads to rough estimates.
- Undersizing a battery so it cannot cover core evening hours.
- Forgetting incentives or choosing a TOU plan that does not fit your profile.
When a battery pays
A battery tends to pencil out when the spread between your evening retail rate and the export credit is wide for many days of the year. It also helps when you can consistently charge from solar and fully discharge during peak hours. If a battery is too costly or your evening load is small, solar-only or targeted load shifting may be better.
Final thoughts
Under NEM 3.0 in San Diego, the game has changed from exporting as much as possible to using as much as you can on-site and shifting strategically. The right system is the one that matches your hourly life, not just your annual kilowatt-hours. With a clear plan, solar can still be a strong move for your home and budget.
If you are weighing a solar home or planning upgrades after you buy, our military-first team is here to help you evaluate options through a real estate lens and protect your long-term budget. Connect with Alanna Strei Realty Group to align your home search and energy goals. Book your free VA relocation consultation.
FAQs
Is rooftop solar still worth it in San Diego under NEM 3.0?
- It can be cost-effective when you maximize self-consumption and consider storage or load shifting, but payback is often longer than under retail net metering.
How does a battery change the economics under NEM 3.0?
- A battery lets you store low-value midday energy and use it during higher-price evening periods, which can improve savings if the rate spread justifies the cost.
Do I still get a credit for exported energy with SDG&E?
- Yes. Exports receive a time-varying monetary credit under the Net Billing Tariff, which is generally lower than the retail price you pay for electricity.
What happens if I already have solar on an older NEM plan?
- Customers interconnected under prior NEM rules are generally grandfathered for a set period, commonly 20 years from interconnection, subject to utility and CPUC rules.
Are there solar incentives available in California now?
- The federal residential Investment Tax Credit has recently been 30 percent for many systems. Verify current eligibility and any state or local programs before you buy.
Should I buy a bigger array or add a battery first?
- Model both. If your daytime load is modest and export credits are low, adding storage or shifting loads often beats oversizing an array that exports a lot.
