The Bay Area Homeowner's NEM 3.0 + Battery Buyer's Guide
California's switch to NEM 3.0 changed solar economics. This free guide explains what actually changed, how to size a solar-plus-battery system so it pays off, which incentives still apply, and the exact questions to ask any installer before you sign.
The 30-second version
- NEM 3.0 cut export credits by roughly 75% versus NEM 2.0 — so exporting daytime solar to the grid is worth far less than it used to be.
- A battery is now the key to payback. Instead of exporting cheaply, you store your midday solar and use it during expensive evening peak hours.
- Right-sizing matters more than ever. An oversized export-heavy system no longer makes sense; sizing to your usage plus storage does.
Want the numbers for your home? Try the NEM 3.0 savings calculator.
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Why a battery is now essential under NEM 3.0
Under NEM 2.0, the grid effectively acted as a free battery — you exported daytime surplus at nearly retail value and pulled it back at night. NEM 3.0 ended that one-to-one deal. Now your exported energy earns a much lower, time-varying rate, while the power you buy in the evening peak is more expensive than ever. A home battery closes that gap: it banks your cheap midday solar and discharges it during the 4–9 p.m. peak, so you buy far less expensive grid power. That self-consumption — not export credits — is what drives payback under NEM 3.0.
How to right-size your system
- Start from your usage, not your roof. Pull 12 months of PG&E usage (kWh) and your rate plan. Size solar to cover your annual usage, not to maximize exports.
- Match the battery to your evening load. Enough storage to carry your typical evening peak (and key backup circuits) usually beats a huge battery you rarely fully use.
- Plan for the future. Adding an EV or heat pump later? Size the panel and system with headroom now so you don't pay twice.
Incentives & financing checklist (California, 2026)
- California SGIP battery rebate — the Self-Generation Incentive Program can offset part of battery cost, with larger amounts for eligible/equity and high-fire-risk customers. Availability and amounts change; confirm current eligibility.
- $0-down financing — loans and PPA/lease options let many homeowners start with no upfront cost.
- Heads-up: the residential 30% federal solar tax credit is no longer available after 2025. (Commercial and tax-exempt projects may still qualify for the federal Investment Tax Credit — see our commercial and non-profit pages.)
- Always confirm specifics with your tax advisor — we're a solar and electrical contractor, not a tax firm.
10 questions to ask any solar installer
- Are you a licensed C-10 electrical contractor, and what's your license number? (Verify it on the CSLB site.)
- Do your own employees do the install, or do you subcontract it out?
- How did you size the system — from my actual PG&E usage, or a rule of thumb?
- What's the modeled payback under NEM 3.0 (not NEM 2.0) for my home?
- Which battery, and how much usable capacity for evening peak and backup?
- What equipment brands and warranties (panels, inverter, battery), and for how long?
- Who handles permitting and PG&E interconnection — and how long does it take here?
- What's the all-in price, and what financing options do you offer?
- What happens if production is lower than promised — is there a guarantee?
- Can I see local references or recent installs in my city?
Red flags to avoid
- Quotes built on NEM 2.0 math or "you'll sell power back to the grid" promises.
- High-pressure "today only" pricing.
- No license number, or a crew of subcontractors you can't vet.
- An oversized, export-heavy system that ignores storage.
