How California Homeowners Earn Credits by Exporting Solar to the Grid
You Can Earn Credits for Solar Sent Back to the Grid — But How Much Depends on When and Which Utility You're On
One of the most appealing promises of residential solar is the ability to earn credits for power you send back to the grid. The mental image is satisfying: your panels generate more electricity than you need, the surplus flows to your neighbors' homes through the utility infrastructure, and your meter runs backward — crediting you for the contribution.
That image is essentially accurate. But the value of those credits varies enormously depending on your utility, when you export the power, and which version of California's net billing rules applies to your installation. Understanding this in detail is the difference between going solar with accurate expectations and being disappointed by a bill that doesn't shrink as much as you expected.
How Grid Export Credits Work
When your solar panels generate more electricity than your home is consuming at a given moment, the surplus flows through your meter and onto the distribution grid. Your utility registers this export and applies a credit to your account.
How large that credit is — and how it applies to your future bills — depends on the net metering or net billing program your system is enrolled in.
NEM 1.0 (Legacy): The original California net metering program credited homeowners at 1:1 with retail rates. A kilowatt-hour exported in the afternoon was worth the same as a kilowatt-hour purchased in the evening. This program is no longer available to new installations but remains grandfathered for existing NEM 1.0 customers.
NEM 2.0 (2016–2023): Slightly reduced from NEM 1.0, with adjustments for non-bypassable charges, but still providing near-retail credit rates. Also grandfathered for existing customers who enrolled before April 2023.
Net Billing / NEM 3.0 (April 2023–present): The current program for new solar installations. Export credits are based on the utility's "avoided cost" — the wholesale rate at which the utility can procure power on the spot market. This rate fluctuates by time of day and season but is typically $0.02–$0.08/kWh during midday solar peak hours — dramatically lower than retail rates.
The Timing Effect: When You Export Determines What You Earn
Under NEM 3.0, export credit rates are not flat. They vary significantly by time of day based on the utility's avoided cost calculator:
Midday (10 AM–2 PM): Export rates are typically lowest. The grid has abundant solar supply from both rooftop and utility-scale systems during these hours. Your marginal value to the grid is minimal — the utility doesn't need your surplus much.
Morning ramp (6–9 AM): Export rates are higher. Grid demand is rising faster than solar generation, and distributed generation has more value.
Evening peak (4–9 PM): If you have excess battery power to export during this window, rates can be meaningfully higher — though most well-designed systems prioritize supplying home loads over exporting.
Winter evenings and grid stress events: Export rates spike significantly when the grid is stressed. This is when distributed storage exporting can earn the most credit per kWh.
Smart battery systems can be programmed to export during high-value windows while ensuring home loads are covered — capturing additional export revenue on top of self-consumption savings.
Utility-by-Utility Differences
SCE (Southern California Edison): Serves much of Ventura County, the Inland Empire, and greater Los Angeles. SCE's avoided cost rates under NEM 3.0 follow the CPUC's standard methodology with some seasonal and regional variations. SCE's TOU-D-PRIME rate makes peak-hour self-consumption particularly valuable.
PG&E (Pacific Gas & Electric): Serves Northern and Central California. Similar NEM 3.0 framework with its own rate schedule specifics. Some PG&E territories have different avoided cost profiles that affect optimal export timing.
SDG&E (San Diego Gas & Electric): Serves the San Diego region. SDG&E has historically had California's highest residential rates, making self-consumption savings especially powerful. Export credits follow the same NEM 3.0 framework.
LADWP (Los Angeles Department of Water and Power): A municipal utility not regulated by the CPUC. LADWP has its own net billing structure that differs from NEM 3.0. Homeowners in the city of Los Angeles should verify their specific program structure.
The Bottom Line for Export Credits Under NEM 3.0
Under NEM 3.0, the strategic priority is clear: self-consumption first, storage second, export last. Every kilowatt-hour you consume from your own solar generation or battery is worth the full retail rate you'd otherwise pay the utility — $0.30–$0.65/kWh depending on time of day. Every kilowatt-hour you export earns $0.02–$0.15/kWh at most times.
The math is unambiguous. Design your system for self-consumption and storage, not export maximization. A battery that prevents even one peak-hour kilowatt-hour from being purchased from SCE is worth more than exporting several kilowatt-hours to the grid during midday. Homeowners who understand this design principle go into solar with realistic expectations and systems that actually perform well under current rules. Homeowners who don't may be surprised to find that generous export credits don't materialize under NEM 3.0.
How My Home & Solar Solutions Approaches Export Optimization
We design solar-plus-battery systems that maximize self-consumption first, then capture available export opportunities during high-value windows. Every system we recommend includes an analysis of your utility's time-of-use rate structure, expected export credit values by hour, and the optimal battery programming strategy for your specific situation.
For qualifying California homeowners, we also explain exactly what to expect from export credits — honestly and specifically — so you can evaluate your solar investment with accurate numbers, not marketing projections.
Visit https://myhomesolution.org/southern-california-edison-net-billing to learn more about how SCE's net billing rate plan affects your solar export credits and what the right strategy looks like under current rules.
