Net Metering Savings Calculator

Frequently Asked Questions

How do I estimate annual net-metering savings?

Multiply annual production (kWh) by your blended retail rate, then subtract grid kWh you still import × that rate. A 9,000 kWh/yr system at $0.18/kWh saves about $1,620/yr under NEM 1.0/2.0 full-retail credit.

What changes under NEM 3.0?

California's NEM 3.0 credits exports at the utility's "avoided cost" (often $0.05–$0.08/kWh) instead of retail. Payback stretches from ~6 years to 9–12 years unless you add a battery to self-consume the midday surplus.

Do I get paid for excess generation each year?

Under most NEM 2.0 tariffs, net surplus at the annual true-up is paid at a low wholesale rate ($0.02–$0.04/kWh), so sizing the system above 100% of usage rarely pays. Aim for 90–100% offset.

Do non-bypassable charges still apply?

Yes - California, for example, charges ≈ $0.02–$0.03/kWh in non-bypassable fees on every kWh imported from the grid, even if you export an equal amount. Include these in any savings estimate to avoid overstating the benefit.

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This calculator provides estimates for informational purposes only. Results are based on assumptions and may not reflect actual outcomes. Consult qualified professionals in relevant fields before making important decisions based on these results.

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How This Calculator Works

Net metering is the billing arrangement that determines what a utility pays you for the solar kWh you export to the grid. Under the older NEM 1.0 / 2.0 rules (still in force in most US states), every exported kWh nets against an imported kWh at full retail price - effectively a 1:1 trade that makes a properly sized array zero out the bill. Under NEM 3.0 (California, April 2023 onward, and increasingly elsewhere), exports are paid at the utility's avoided cost - typically $0.05–$0.10/kWh versus $0.30+ retail, a 70–80% haircut. This tool estimates annual bill savings under either regime from your production, household usage, retail and export rates, and the monthly minimum charge that you pay regardless of how much you export.

Formula / Method

Daytime self-consumption is approximated as 40% of annual usage occurring while the sun is up; self-consumed kWh = min(production, daytime use). Exports = max(0, production − self-consumed). Imports = max(0, total use − self-consumed). Under NEM 2.0, savings = min(production, use) × retail + surplus × export rate. Under NEM 3.0, savings = self-consumed × retail + exports × (low) export rate. Net savings = gross savings − minimum charge × 12. Bill reduction % = savings ÷ (use × retail). The 40% daytime fraction is the residential average per NREL ResStock; homes with daytime occupancy or heat pumps can reach 50–60%, while empty daytime homes drop to 20–30%.

Worked Example

California home, 11,000 kWh/year usage, 9,000 kWh/year production, retail rate $0.32, NEM 3.0 export rate $0.08, $15 monthly minimum. Daytime use ≈ 4,400 kWh; self-consumed = min(9,000, 4,400) = 4,400 kWh; exports = 4,600 kWh; imports = 6,600 kWh. NEM 3.0 savings = 4,400 × 0.32 + 4,600 × 0.08 = $1,408 + $368 = $1,776. Minus $180 in minimum charges, net annual savings ≈ $1,596. Under the old NEM 2.0, all 9,000 kWh would credit at $0.32 = $2,880 in savings - the NEM-3 hit is roughly $1,100/year for the same system. A battery that shifts 3–4 kWh of export-time energy to evening self-consumption closes most of that gap.

Common Mistakes

Assuming your state pays 1:1 under any rules - check the current tariff in your utility's rate book; many states have shifted to time-of-use or avoided-cost compensation.

Forgetting the minimum/fixed monthly charge - even a system that produces 100% of usage still owes the $10–$25 monthly customer charge.

Ignoring time-of-use rates - under TOU, summer 4–9 p.m. exports may credit at peak prices, but you also pay peak prices for imports.

Sizing the array to produce 110% of usage under NEM 1.0/2.0 - most utilities zero out surplus credit annually at low avoided cost.

Assuming a battery is always a winning add-on - under generous 1:1 NEM, batteries pay back slowly; under NEM 3.0 with high retail rates they pay back fast.

Tips & FAQ

Will my state stay on NEM 2.0? Probably not forever. NEM 3.0 is spreading state by state as utility solar penetration rises and grid-cost recovery becomes contentious; assume any new install today may face a sunset clause within 5–10 years. What size array under NEM 3.0? Size for self-consumption, not export. A smaller array (e.g. covering 80% of daytime load) plus a battery often beats a larger export-heavy array. Time-of-use rates: EV-2A and similar TOU schedules pay $0.50+/kWh during peak summer evenings - load-shifting via batteries multiplies the value of every stored kWh. True-up: annual true-up reconciles your full year's credits and debits; surplus generation usually pays low avoided cost or carries no value. Demand charges: some commercial NEM tariffs include a $/kW demand charge based on peak 15-minute usage - solar alone may not reduce this; batteries can. Grandfather periods: existing customers under NEM 1.0 / 2.0 are typically grandfathered for 15–20 years; check your interconnection agreement. Virtual NEM & community solar: for renters or shaded roofs, community solar subscriptions deliver similar savings without rooftop equipment. This tool models a stylised year - real bills depend on TOU rates, seasonal mix, and demand charges; consult a local installer for a site-specific quote.

Net Metering Savings Calculator

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