Net Metering in 2026: What Your State Actually Offers

Why Net Metering Matters

Net metering is the policy that lets solar owners "bank" excess electricity with their utility and draw it back later. The rate at which you're credited for that excess power has an enormous impact on your system's payback period.

How Net Metering Works

When your panels produce more than you're using — typically midday on sunny days — the excess flows back to the grid. Your meter runs backward (or a second meter tracks the export). At billing time, your utility credits you for that exported energy.

The key variable: at what rate?

Full Retail Net Metering (Best Case)

You're credited at the same rate you pay for electricity. If you pay $0.15/kWh, you're credited $0.15/kWh for every kWh you export. Most favorable for solar economics. States with strong retail NEM: Massachusetts, New Jersey, New York, Maryland, Colorado.

Avoided Cost / Wholesale Rate (Worst Case)

You're credited at the utility's wholesale cost of power — typically $0.03–0.06/kWh, far below retail. This dramatically reduces the value of excess solar production and makes right-sizing your system more important. States that have moved in this direction: Nevada (partially reversed), Hawaii, some California utilities under NEM 3.0.

California NEM 3.0: A Case Study

California's NEM 3.0 (effective April 2023) reduced export credits by ~75% compared to NEM 2.0. The result: solar-only systems have longer payback periods, but solar + battery systems are now more economically compelling because self-consumption is more valuable than export.

Virtual Net Metering and Community Solar

If you can't install solar on your own property (renter, shaded roof, commercial tenant), community solar programs let you subscribe to a share of an offsite solar array and receive credits on your utility bill. Available in: New York, Massachusetts, Illinois, Minnesota, Maryland, and others.

How to Check Your State

• Visit DSIRE.org and search your state for net metering policies.
• Check your utility's tariff schedule — net metering terms are published there.
• Ask your installer to model your economics under your specific utility's current NEM policy.