What is net metering? Net metering vs net billing in 2026

What your utility pays for the power your panels send to the grid decides a big part of your savings. Here's how the programs differ.

Net metering credits the solar power you export to the grid, usually one kWh against one kWh you buy later. Net billing credits exports at a separate, lower rate. Most new customers in the cities I cover are on net billing: where there is a single export rate below the retail rate, exports earn 3.45–9.91¢ per kWh, against 14.1–15.9¢ for power bought from the utility.

Three ways utilities credit exports

• Net metering. Exports offset imports kWh for kWh. The US Department of Energy describes it as an arrangement in which system owners are compensated for solar power exported to the grid (DOE).
• Net billing. Power you use at home still saves your full rate; exported kWh earn an export credit set by the utility or regulator, often well below the retail rate.
• Value of solar. All production is credited at one rate and all consumption is billed separately, as with Austin Energy.

What each utility pays for exports

Energy charge: median of current standard residential plans (OpenEI URDB), fixed charges excluded. Export programs from utility tariffs and regulators.

Why it matters: one system, two credits

A 7 kW system in Phoenix makes about 12,285 kWh a year. If every kWh were worth Arizona Public Service's energy charge of 14.1¢ (full net metering), it would save about $1,726 a year. With half the power exported at the 5.55¢ credit, it saves about $1,204. Savings by utility.

State rules

• Arizona: Net billing. Utilities regulated by the Arizona Corporation Commission (APS, TEP) credit exports at the Resource Comparison Proxy (RCP) rate, locked for 10 years from interconnection; the rate for new customers can drop by no more than 10% per year. SRP is not ACC-regulated and sets its own export credit. (checked 2026-09-13)
• California: Net Billing Tariff for customers applying for interconnection since 2023-04-15: exports are credited at CPUC Avoided Cost Calculator values (usually lower than import rates), with the tariff locked for nine years. SDG&E customers are excluded from the export compensation adder. (checked 2026-09-13)
• New Jersey: Net metering under N.J.A.C. 14:8-4.3: when a home sends more electricity to the grid than it takes in a billing period, the utility and supplier credit the excess against the next month's bill, credits carry over month to month through the customer's 12-month annualized period, and any kilowatt-hours still in excess at the end of the year are paid at the supplier's avoided cost of wholesale power (average locational marginal price), which is far below the retail rate. (checked 2026-09-21)
• New York: Phase One net metering remains in place for homes: exports are netted against use and credits carry over, for a 20-year term from interconnection. Systems that received permission to operate on or after January 1, 2022 pay a monthly Customer Benefit Contribution set by the utility per kW of DC system size (NYSERDA, PSC VDER orders). (checked 2026-09-21)
• Texas: No statewide net metering rule; export compensation is set by each utility. CPS Energy is a municipal utility outside the competitive market. (checked 2026-09-14)

Is net metering going away?

In the states I cover, full retail net metering is closed to most new customers: California moved to net billing in April 2023, Arizona's regulated utilities credit exports at a rate that can fall for new customers each year, and Texas leaves it to each utility. Your credit is set by the rules in place when you connect, often locked for a number of years.

What to do with this

• Ask the installer which export credit the savings estimate uses.
• Use more of your solar power at home during the day.
• Where exports earn little, a smaller system or a battery can make more sense: sizing.

Keep reading

• Is solar worth it in 2026? — Payback without the federal credit in the cities I cover, and when solar is a weak deal.
• How much solar panels save — Yearly and monthly savings by utility, and why they change from month to month.
• Disadvantages of solar panels — Nine downsides to weigh before you sign, with numbers from real tariffs.

Installer records by city: solar companies in Phoenix, solar companies in Tucson, solar companies in San Antonio, solar companies in Austin, solar companies in San Diego, solar companies in Fresno, solar companies in Chandler, solar companies in Scottsdale, solar companies in Gilbert, solar companies in Glendale, solar companies in Tempe, solar companies in Peoria, solar companies in Surprise, solar companies in San Jose, solar companies in Bakersfield, solar companies in Clovis, solar companies in Chula Vista, solar companies in Oceanside, solar companies in Carlsbad, solar companies in Toms River, solar companies in New York, solar companies in Elizabeth, solar companies in Yonkers.

Updated 2026-09-26.