Short answer: under SCE’s Net Billing Tariff, often called NEM 3.0 or the Solar Billing Plan, the electricity your panels export to the grid is credited at “avoided cost” prices that vary by hour and month, not at the retail rate you pay. On a typical summer day that means a few cents per kilowatt-hour for midday exports and much more for evening exports. The electricity you use directly still offsets the full retail rate. So the goal of a modern solar design in Palmdale is to use as much of your own production as possible, and a battery is the main tool for doing that.
What Net Billing replaced
Under NEM 2.0, a kilowatt-hour you exported at noon earned roughly the same credit as a kilowatt-hour you bought at 7 p.m., minus small non-bypassable charges. The grid acted like a free battery. That ended for new SCE, PG&E and SDG&E customers whose interconnection applications were submitted after April 14, 2023. Existing NEM 2.0 customers keep their tariff for their 20-year term. LADWP, which serves the City of Los Angeles, is a municipal utility with its own net-metering rules and is not on Net Billing.
How export credits work
Each hour, SCE meters the energy your system exports and multiplies it by that hour’s Energy Export Credit price. Those prices come from the CPUC’s Avoided Cost Calculator, which estimates what it would cost the utility to buy or generate that power instead. SCE’s own illustration is blunt about the spread: exports during summer evenings (4–9 p.m.) earn about $0.21–0.23 per kWh, while midday exports earn about $0.05–0.06 per kWh. Winter values are lower still.
The prices you enroll under are fixed for nine years, and SCE notes that eligible residential customers who enroll before 2028 receive an extra credit of roughly $0.04 per kWh on exports. After the lock-in period, credits follow the then-current calculator.
On the purchase side, Solar Billing Plan customers are placed on the TOU-D-PRIME rate. That plan is cheapest overnight and most expensive on summer weekday evenings, the same hours your panels are winding down.
Why this changes the design
Under the old rules, installers sized systems to cover 100% of annual usage and let the grid absorb the mismatch. Under Net Billing, an oversized system exports a lot of cheap midday power and still buys expensive evening power. Three things now matter more than raw system size:
1. Self-consumption
Every kilowatt-hour you use while the sun is up is worth the full retail rate you avoided paying. Running the pool pump, dishwasher, laundry and pre-cooling the house between 10 a.m. and 3 p.m. is free money under this tariff. Smart thermostats and appliance timers are the cheapest “storage” you can buy.
2. Orientation
A west-facing array produces later into the afternoon than a south-facing one. It makes fewer total kilowatt-hours per year but more of them land in the high-value evening window. On some Antelope Valley roofs a split south/west layout is the right call.
3. Storage
A battery captures midday production that would otherwise export for pennies, then discharges it from 4 to 9 p.m. when buying from SCE is most expensive. Systems from Tesla, Enphase, FranklinWH and others can be set to prioritize this “self-consumption” or “time-of-use” mode while reserving a portion for outages. See our battery storage page for the options we install.
A Palmdale example, without the sales math
Picture a home that uses 1,200 kWh in a July month with air conditioning. A solar-only system might produce 1,300 kWh that month, but if the family is out during the day, perhaps 700 kWh of that is exported at low credit prices and the home still buys 600 kWh in the evening at peak prices. On paper the system “covered” the usage; on the bill, the export credits do not come close to the evening purchases.
Add a battery sized to the evening load and most of that 700 kWh is stored and used at home instead. The exports shrink, the evening purchases shrink, and the bill finally reflects the production. The exact figures depend on your usage, which is why we ask for a year of SCE data before designing anything.
What Net Billing does not change
- Palmdale still gets roughly 6.2 peak sun hours a day, so panels here produce more than in most of the state.
- SCE rates remain high. The average residential rate was about 34.4 cents/kWh as of June 2026 (a slight dip from the end of 2025, after a 9.1% typical-bill increase in 2025), and the CPUC-approved 2025 General Rate Case authorized further base-revenue increases for 2026 through 2028.
- You still get an annual true-up, and credits beyond your usage may be adjusted so the account never goes negative. Sizing to your real usage, not beyond it, avoids donating power.
- Batteries can qualify for SGIP rebates when budgets are open; the equity and resiliency tiers are aimed at income-qualified households and homes in high fire-threat areas or subject to Public Safety Power Shutoffs. Current status and figures are on our incentives page.
Questions to ask any installer about NEM 3.0
- Was my production estimate modeled hour by hour against the TOU-D-PRIME rate and export prices, or annually?
- How much of my production will I self-consume with and without a battery?
- What battery mode will you configure, and how much reserve will you leave for outages?
- What happens to my bill in winter, when production is low and export credits are lowest?
- Is the system sized to my usage, or to a number that makes the payback look better?
If you want those answers for your own home in Palmdale or Lancaster, we will model it from your SCE data and show you the hour-by-hour picture. Financing options for solar and storage, including $0-down loans, are explained on the financing page.
Sources
- SCE: How Solar Billing Plans work (export credits, 9-year lock, TOU-D-PRIME, true-up)
- Aurora Solar: Explaining and modeling California’s Net Billing Tariff (April 2023 effective date)
- EnergySage: LADWP net metering (municipal utility, not on NEM 3.0)
- SCE: Rate advisory (2026 residential average rate)
- CPUC: SCE 2025 General Rate Case decision fact sheet
- CPUC: Participating in SGIP
- TurbineGenerator.org: Palmdale peak sun hours
