Battery Storage vs. Net Metering: What’s Better for California Homes?
Article
Ste E, Northridge, CA 91324
Monday – Friday: 8AM – 5PM
Published November 21, 2024
REQUEST A QUOTE AND GET A 1000$ DISCOUNT
Battery Storage vs. Net Metering: What’s Better for California Homes?
This shift means that sending power back to the grid no longer brings the same savings it once did. Homeowners in these areas can see far lower bill reductions if they don’t store their solar energy for later use.
But starting with NEM 3.0, things changed for most California homeowners. The three main investor-owned utilities (PG&E, SCE, and SDG&E) now pay much less for exported energy. Credits are based on an avoided-cost calculation that reflects the wholesale value of electricity, not the retail price. In many cases, these new export rates are about 70–80% lower than before.
As more California homeowners switch to solar, one question comes up again and again: should you rely on net metering or invest in a battery storage system?
The answer depends on where you live and which utility you use. Under the latest net metering rules (NEM 3.0), the difference between these two options has become much bigger than most people realize.
The answer depends on where you live and which utility you use. Under the latest net metering rules (NEM 3.0), the difference between these two options has become much bigger than most people realize.
What Is Net Metering and How It Works Today
Net metering lets you send unused solar power back to the grid and get credits that offset the electricity you use at night or on cloudy days.
In the past, California’s net metering system was simple and generous. Homeowners under NEM 1.0 or NEM 2.0 got close to a one-to-one credit for each kilowatt-hour sent to the grid. That meant every extra unit of solar produced during the day reduced your bill by the same amount later.
In the past, California’s net metering system was simple and generous. Homeowners under NEM 1.0 or NEM 2.0 got close to a one-to-one credit for each kilowatt-hour sent to the grid. That meant every extra unit of solar produced during the day reduced your bill by the same amount later.
Why Battery Storage Matters Under NEM 3.0
So for LADWP customers, battery storage isn’t about saving more money; it’s about peace of mind and energy independence.
However, a battery can still be a smart investment for reliability. During power shutoffs or grid maintenance, solar panels alone can’t power your home, but with battery storage you can keep the lights on, protect perishables, and stay comfortable even when the grid goes down.
If you live in the Los Angeles Department of Water and Power (LADWP) service area, your situation is different.
LADWP still offers 1:1 net metering credits based on your Time-of-Use rate. That means when your system sends energy back to the grid, you receive credits equal to the full retail value of that electricity.
LADWP still offers 1:1 net metering credits based on your Time-of-Use rate. That means when your system sends energy back to the grid, you receive credits equal to the full retail value of that electricity.
Battery storage systems let you keep the extra solar energy your panels generate during the day and use it in the evening when utility rates are higher.
Instead of selling power back to the grid at a low credit, you can use that stored energy yourself. This helps you avoid buying expensive electricity during peak hours and makes your home more independent from the grid.
Instead of selling power back to the grid at a low credit, you can use that stored energy yourself. This helps you avoid buying expensive electricity during peak hours and makes your home more independent from the grid.
The LADWP Difference
Home batteries can also provide backup power during outages, which is becoming more valuable across California as blackouts and power shutoffs increase.
With a properly sized battery, you can run essential appliances, lighting, and even your HVAC system for hours or days, depending on the setup.
With a properly sized battery, you can run essential appliances, lighting, and even your HVAC system for hours or days, depending on the setup.
Home batteries can also provide backup power during outages, which is becoming more valuable across California as blackouts and power shutoffs increase.
With a properly sized battery, you can run essential appliances, lighting, and even your HVAC system for hours or days, depending on the setup.
With a properly sized battery, you can run essential appliances, lighting, and even your HVAC system for hours or days, depending on the setup.
Whether net metering or battery storage is better for you depends on:
For Most Other Californians, Batteries Win
If you are in the territory of PG&E, SCE, or SDG&E, NEM 3.0 makes battery storage far more attractive.
Instead of exporting your solar at a much lower rate, you can use that power yourself when it’s worth more. Many homeowners are finding that this change shortens the payback period of their solar system, even though batteries add upfront cost.
Instead of exporting your solar at a much lower rate, you can use that power yourself when it’s worth more. Many homeowners are finding that this change shortens the payback period of their solar system, even though batteries add upfront cost.
Your household’s energy usage
Your utility provider (LADWP vs. PG&E, SCE, SDG&E)
Choosing What’s Best for Your Home
With incentives like the Self-Generation Incentive Program (SGIP) and federal tax credits, the gap between solar-only and solar-plus-storage systems is narrowing fast. Over ten years, the additional savings and protection from rising rates often outweigh the cost of the battery.
Final Thoughts
Your local rate plan and Time-of-Use schedule
Available incentives in your area
Ready to see which setup works best for your home?
Contact Cali Energy today for a free consultation and customized solar-plus-storage analysis.
Contact Cali Energy today for a free consultation and customized solar-plus-storage analysis.
California’s solar landscape has changed dramatically in recent years. For most homeowners under NEM 3.0, battery storage is now the key to maximizing solar value. For those served by LADWP, 1:1 retail net metering still offers excellent savings, but batteries remain a practical option for backup power and peace of mind.
If you’re under LADWP, net metering alone can still give you strong financial returns.
If you’re under NEM 3.0, adding a battery helps you keep more of your solar savings and protect against rate changes and outages.
If you’re under NEM 3.0, adding a battery helps you keep more of your solar savings and protect against rate changes and outages.
Monday – Friday: 8AM – 5PM
