Updated October 2026

Comparing solar offers in California can feel expensive to skip, because NEM 3.0 changes how much your exported power is worth. Since April 2023, new solar customers of SCE, PG&E, and SDG&E have been on net billing, and that makes self consumption and battery sizing matter more. We help you compare offers for your address so you can judge the rate, term, escalator, and whether a battery makes sense before you sign.

NEM 3.0 in California vs older net metering what changed for homeowners

Under nem 3.0 california, the big change is simple: power you send to the grid is credited at a lower rate than the retail rate you pay for electricity. That makes self consumption, using solar power in the home as it is produced, more important than it was under older net metering.

Before April 2023, many California homeowners on the older net metering structure could get closer to retail value for exported power. Under the california net billing tariff, exports still count, but they are not treated the same as power you use on site. That changes how you size a system, when you run appliances, and whether a battery makes sense.

Who is affected in California

This change applies to new solar customers of the large investor owned utilities, including SCE, PG&E, and SDG&E, since April 2023. If you are in California, the first step is to confirm which utility serves your address, because that shapes the quote and the contract terms.

Municipal utilities follow their own rules. For example, LADWP and other city owned utilities can have different export credits, interconnection rules, and timelines, so solar in California is not one single policy for every homeowner.

Why batteries matter more now

Under net metering 3.0 california, the goal is not just to produce solar power, but to use more of it before it leaves the home. A battery stores extra daytime production so you can use it later in the evening, which can reduce how much low value export you rely on.

That does not mean every home needs a battery. But if your usage is heavy at night, or if your solar array will often make more than the home can use during the day, battery storage can play a bigger role in the design. A battery is one unit of stored energy, and homeowners commonly see installed pricing around $9,000 to $17,000 for one unit, depending on the home and equipment.

If you are comparing financing paths, the structure matters under NEM 3.0. A loan for solar or buying solar with cash can align with ownership, while a power purchase agreement puts a third party in control of the system. The right fit depends on how much power you use at home, how much you export, and whether you want storage in the plan.

In plain English, NEM 3.0 rewards smart sizing and good daytime usage habits more than the older rules did. The home, the roof, and the utility all matter together now.

How upfront costs and monthly bills differ under solar loans PPAs and leases

Solar loans, PPAs, and leases all change your cash flow in different ways. With a solar loan, you usually pay for the system over time and own it. With a power purchase agreement or a roof top lease, a third party owns the equipment, and you pay for the use of the system or the electricity it produces.

That ownership difference matters in California, especially under NEM 3.0 in California. Since April 2023, exports to the grid are credited at a lower rate than the retail rate for customers of SCE, PG&E, and SDG&E, so the shape of your bill matters more than just the panel count. Municipal utilities, including LADWP, follow their own rules.

What you usually pay at the start

A solar loan can be structured with no money down, but the exact down payment depends on the lender, your credit, and the installer. The loan amount may also include dealer fees, which can raise the financed balance above the sticker price of the system. In 2026, loan terms commonly run 10 to 25 years, with APRs often in the range of about 5 to 10 percent.

PPAs and leases also often start with no money down. Instead of buying the system, you agree to a contract term, usually 20 to 25 years, and you make regular payments based on the contract. A prepaid PPA is different, because you make one upfront payment for a set number of years of production.

How the monthly payment structure works

With a loan, your monthly payment goes to the lender. The system itself is an asset you are paying off, and once the loan is paid, you stop making that payment. Your utility bill still changes with how much electricity you import from the grid, especially if your home uses more power at night or in the evening.

With a PPA, you pay for each kilowatt hour, or kWh, that the system produces. With a lease, you usually pay a fixed monthly amount for the equipment. In both cases, the third party owns the system, and the contract may include a yearly escalator, which is a built in price increase. That escalator is commonly between 0 and about 3 percent.

Before you compare offers, make sure you look at the monthly payment, the escalator, the contract term, any dealer fee, and who owns the system. If you want a side by side look at loan terms for solar and ownership terms, those details matter more than the first month payment alone.

PPA and lease customers should also check what happens if the system underproduces or if the roof needs work later. The contract should spell out who handles service, removal, or roof access. Since PPAs and leases are third party owned, homeowners should not expect ownership incentives from those options.

Will I own the system and what happens if I sell my home

Ownership depends on the financing. With a solar loan or cash purchase, you own the system on the roof. With a solar PPA or a solar lease, a third party owns the equipment, and you pay for the power it produces or for use of the system under the contract.

That difference matters if you move. If you own the system, it can stay with the house and be part of the sale, or it can sometimes be paid off and removed if the contract allows it. If you use a PPA or lease, the agreement usually has to be transferred to the buyer, bought out, or handled another way spelled out in the contract.

In California, this decision sits alongside nem 3.0 california rules for many homes served by SCE, PG&E, and SDG&E. Since April 2023, exports to the grid are credited at a lower rate than the retail rate, so self consumption matters more. That makes it worth asking how your system is designed to cover daytime use and whether a battery fits your home.

What each option means for ownership

• Cash purchase: you own the panels, inverter, and battery if you add one. You decide whether the system stays with the home when you sell.
• Solar loan: you own the system, but the lender has a payment claim until the loan is paid off. A buyer may need to assume the loan or work with you on payoff at closing.
• Solar lease: the leasing company owns the system. You get the use of the equipment under the lease, but not title to it.
• Solar PPA: the third party owns the system and you pay for solar production under a power purchase agreement.

Transfer rules matter as much as the monthly payment. Some buyers are comfortable taking over a lease or PPA if the contract is clear and the solar production fits the home. Others prefer a system that is owned outright, because it is simpler to explain during a sale.

If you are comparing offers in California, make sure the paperwork shows who owns the system, who handles repairs, what happens if the roof needs work, and how the agreement moves if you sell. Municipal utilities, including LADWP, set their own solar rules, so the utility serving the address also belongs in the review. For a broader look at ownership tradeoffs, see our loan option for solar and solar lease overview pages.

What does net billing mean for total solar cost over the full term

Under nem 3.0 california, the total cost of solar depends less on how much your system produces and more on how much of that power you use in the home. Since April 2023, customers of SCE, PG&E and SDG&E are on net billing, which means exports to the grid are credited at a lower rate than the retail rate.

That changes the math over the full term. A system that sends a lot of midday power to the grid may look good on paper, but the credit for those exports will usually not match what you pay for electricity from the utility later. The key question is how much of your solar production offsets real on site use, such as running appliances, charging an EV, or cooling the home during daylight hours.

Why self consumption matters more now

In net metering 3.0 california, every extra kilowatt hour, or kWh, you use directly in the home has more value than a kWh exported at the lower net billing rate. That is why system design, roof orientation, usage timing, and panel size matter together.

• Match the system to your load, so it fits your typical monthly usage instead of oversizing for exports.
• Shift daytime use when you can, especially for flexible loads like laundry or EV charging.
• Check your utility, since LADWP and other municipal utilities set their own solar rules and rates.

This is also why a battery can change the long term picture. A home battery stores midday solar so you can use more of it after sunset, which can reduce the amount you export at the lower credit rate. For California homeowners comparing options, a battery does not erase net billing, but it can help you keep more of the value your panels produce.

How batteries and contract type affect the total term cost

If you are comparing a cash purchase, solar loan, solar PPA or solar lease, look past the first month and ask how each structure handles exported power. A third party owned system, such as a PPA or lease, normally claims any incentives that still apply, so ownership based tax benefits are not part of that contract in the way they are with a purchase.

That is why loan offers for solar, buying solar with cash, and battery add ons should be reviewed alongside the bill itself. If your roof and usage pattern leave a lot of daytime production unused, the full term cost can look very different from a home that soaks up most of its solar on site. We compare those tradeoffs by address, because the numbers depend on the home, the utility and the installer.

How to choose the right solar quote for your home and start comparing offers

The best solar quote is the one that fits your roof, your utility, and how long you plan to stay in the home. In California, that matters even more under NEM 3.0, because exports to the grid are credited at a lower rate than retail power, so self consumption and battery storage can change the value of a system.

Start by comparing the contract, not just the monthly payment. A solar quote should clearly show the system size in kW, the term, the escalator, and what happens if you sell the home. An escalator is the yearly price increase written into a PPA or lease, usually stated as a percent.

What to compare side by side

• Term length: Solar loans often run 10 to 25 years. PPAs and leases usually run 20 to 25 years. Make sure the term matches how long you expect to keep the home.
• Total cost over the full term: A low first year payment can hide a higher long term cost if the escalator is steep or the dealer fee is built into the loan.
• Warranty coverage: Ask which parts are covered, for how long, and who handles service if the inverter fails. An inverter changes direct current from the panels into usable alternating current for the home.
• Ownership and transfer terms: If you sell, see whether the agreement can be assigned to the buyer, bought out, or paid off.

We also recommend checking whether the proposal includes a roof replacement assumption, battery storage, or a production guarantee. In California, these details matter because one home may benefit from more daytime self use, while another needs a battery to avoid sending too much power back at a lower credited rate.

Watch for surface level red flags. Vague language about “estimated savings,” missing escalator terms, unclear warranty language, and a quote that does not name the utility serving the address all deserve a closer look. LADWP and other municipal utilities set their own solar rules, so the quote has to match the actual utility, not just the city.

At Collective Power, we are an independent solar brokerage, not the installer, and we compare solar PPA, prepaid PPA, solar lease, solar loan, and cash purchase offers side by side for your address. That makes it easier to compare the rate per kWh, the term, and the full contract terms before you sign any paperwork.

Gather at least a few quotes, line them up with these criteria, and read the fine print before you choose. If you want, request a quote online or call (877) 840-4504, and we can help you review the options that fit your home.

Written by the team at Collective Power, an independent solar brokerage. We compare solar PPA, prepaid PPA, lease, loan and cash options for homeowners in California and Massachusetts, and we are not the installer. Phone: (877) 840-4504. Offers, savings and incentives vary by address, utility, credit and installer, and nothing here is tax, legal or financial advice. Ready to compare? Request your free quote online.