Net Metering vs Net Billing: What Your Solar Exports Are Worth

Why exports matter at all

Solar panels make the most power at midday, when most homes use the least. A typical system without a battery sends a large share of its output — often half or more — out to the grid, then draws power back in the evening. What your utility pays for those exports decides how much the system saves.

Net metering: exports earn the retail price

Under net metering, your meter effectively runs backward when you export. A kWh sent to the grid at noon cancels a kWh bought at 8 p.m., so every kWh your panels make is worth the full retail price, whether you used it or not. Utilities net usage and exports over a month or a year; any surplus left at the end is usually paid at a much lower rate, which only matters if your system is bigger than your needs.

Most states still work this way. Some keep the structure with small trims — Nevada pays 75% of retail for surplus beyond a month's use, and Dominion in Virginia pays about 5.8¢ only for surplus left at the end of a year — which makes little difference for a system sized to your use.

Net billing: exports earn an export rate

Under net billing, power you use at home as it's produced still saves the full retail price, because you didn't buy it. But anything you export earns a separate, lower credit — often the utility's "avoided cost" of producing that power itself, a few cents per kWh.

That makes your solar's value a blend. As a working assumption, we treat 40% of a no-battery system's output as used at home and the rest as exported. In California, with average retail electricity at 33.3¢ and exports earning about 7.0¢, that blend values each solar kWh at about 17.5¢ — roughly half of retail. It's why the median California payback on our site is 10.3 years, not the five or six years it would be under the old rules.

States that pay less than retail for exports

As of October 2026, 18 states have moved most customers to net billing or never had net metering:

Rates differ by utility and change, often yearly. City-owned utilities can set their own rules: Los Angeles's LADWP, for example, still credits exports at about retail, so Los Angeles pays back in 7.1 years on our estimates versus 10.3 years for California overall. Sources for every state are listed on our methodology page.

Getting more value under net billing

• Use your solar while it's producing. Run the dishwasher, laundry, pool pump or EV charger in the middle of the day, and pre-cool the house in summer afternoons. Every kWh moved from export to self-use is worth the full retail price instead of the export rate.
• Size the system to your daytime use, not your annual total. Under net billing, extra panels mostly add cheap exports. A somewhat smaller system often pays back faster.
• Consider a battery. Storing midday surplus for the evening turns low-value exports into full-value self-use. Whether that pays for the battery depends on the gap between your retail and export rates — see are solar batteries worth it.
• Look at time-of-use rates. Some export rates are higher on summer evenings. West-facing panels produce more late in the day, when exports and avoided purchases are worth more.

Under net metering

None of that matters much: every kWh is worth retail wherever it goes. Size the system to cover your annual use, skip the battery unless you want backup power, and focus on getting a good price per watt. The main risk is policy change — states keep revisiting net metering, though most protect existing customers under the rules they signed up with for 10 years or more.

Find your state's rules and payback on its state page, or check a city in the search on our home page.