Do You Need a Battery Under NEM 3.0 in California?
Short answer: no — NEM 3.0 doesn’t require a battery. On SCE, a battery pays through one gap: a midday export earns a 2026 system about 7.6¢ in summer, while the same kilowatt-hour bought between 4 and 9 p.m. costs 61¢ on a summer weekday. After storage losses, each kWh a battery shifts is worth about 27–47¢; a battery shifting 10 kWh a day saves roughly $1,400 a year, against $10,000–17,000 installed. On LADWP’s standard rate there is almost no bill case — there it is a backup decision.
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- A battery is not required under NEM 3.0. Solar-only is allowed, and the solar you use as it is made still offsets the full retail price.
- On SCE’s Solar Billing Plan, a midday export earns a 2026 system about 6¢ in summer and 3¢ in winter (plus a 1.6¢ bonus), while the 4–9 p.m. price on TOU-D-PRIME is 61¢ on summer weekdays and 45¢ in winter. That gap is the whole bill case for storage.
- After about 10% storage losses, each kWh shifted is worth 27–47¢. Shifting 10 kWh a day is worth about $1,400 a year; 5 kWh, about $700.
- Against $10,000–17,000 installed, that is a simple payback of roughly 7–12 years at 10 kWh a day — close to a 10–15-year battery warranty. The federal credit has ended and SGIP’s general residential budget is closed in SCE territory.
- On LADWP’s standard rate exports offset purchases kWh for kWh, so a battery is a backup decision. Backup value is separate from bill savings everywhere.
This article answers one question: whether you need a battery at all under NEM 3.0. If you’ve decided to get one, our other guides go deeper:
- Which battery to buy — capacity, power and warranties compared.
- How big a battery you need — a sizing calculator.
- Whole-home vs critical-loads backup — the wiring architecture.
- Virtual power plant earnings — getting paid to share stored power.
So — do you actually need one?
No. Nothing in the Net Billing Tariff forces you to buy a battery, and a solar-only system is still allowed and still saves money. SCE’s own description of the plan starts there: your home uses your solar power first, and only the surplus is exported (SCE).
Two different reasons to add a battery often get blended, and separating them makes the decision clear. 1) Bill economics — using more of your own solar instead of exporting it cheaply. 2) Backup — keeping power on in an outage or a Public Safety Power Shutoff. A battery can win on one, both or neither. This guide is about the first; the second is covered in solar batteries for outages and PSPS.
Why NEM 3.0 changes the battery math
Under NEM 2.0 an exported kilowatt-hour was worth close to the retail price of its hour. The Net Billing Tariff priced imports and exports separately (CPUC).
On SCE’s Solar Billing Plan you buy power on TOU-D-PRIME, the rate Solar Billing Plan customers must be on: 26¢ most hours and 61¢ from 4 to 9 p.m. on summer weekdays (39¢ on weekends), and in winter 24¢ from 8 a.m. to 4 p.m. and 45¢ from 4 to 9 p.m. (SCE). A kilowatt-hour you export earns an Energy Export Credit that, for a system starting in 2026, averages about 6¢ on a summer day and 3¢ on a winter day (SCE), plus a fixed 1.6¢ bonus for nine years (SCE Schedule NBT). A battery stores the midday surplus that would earn those few cents and releases it in the evening, when the same energy would otherwise cost 45–61¢. That difference is the economic case for storage under NEM 3.0; the full rules are in NEM 3.0 explained.
What a battery is worth on SCE: a worked example
Each kilowatt-hour a battery takes in at midday instead of exporting comes back as about 0.9 kWh in the evening. Here is what that trade is worth across 2026, and what a battery that shifts 10 kWh a day would add up to.
| When | Evening price avoided | Midday export forgone (with bonus) | Value per kWh stored | Days in 2026 | At 10 kWh a day |
|---|---|---|---|---|---|
| Summer weekdays (June–September) | 61¢ | 7.6¢ | 47.3¢ | 87 | $412 |
| Summer weekends and Labor Day | 39¢ | 7.6¢ | 27.5¢ | 35 | $96 |
| Winter, every day (October–May) | 45¢ | 4.6¢ | 35.9¢ | 243 | $872 |
| Year | 365 | about $1,400 |
Our calculation: value = 0.9 × evening price − (average midday export credit + 1.6¢ bonus). Prices from SCE TOU-D-PRIME and SCE’s 2026 export averages, checked October 1, 2026; round-trip efficiency from published figures of 89–90% (Tesla, FranklinWH). It assumes the home uses at least 9 kWh between 4 and 9 p.m. every day and that prices stay where they are.
Put that next to the price. A home battery typically costs $10,000–17,000 installed before incentives across three sources: NREL’s modeled benchmark, SGIP project records and Berkeley Lab’s market data (NREL, SGIP, Berkeley Lab; details in solar panel cost in Los Angeles). At about $1,400 a year, simple payback is roughly 7–12 years; a home that can only shift 5 kWh a day saves about $700 a year and waits 14–25. Compare that with the warranty: Tesla covers the Powerwall for 10 years, Enphase its IQ batteries for 15 years or 6,000 cycles, and FranklinWH the aPower 2 for 15 years or 60 MWh, each guaranteeing about 70% of capacity at the end (Tesla, Enphase, FranklinWH). The 30% federal credit ended after 2025 for owner-bought systems (IRS), and as of October 1, 2026 SGIP’s general residential storage budget shows closed in SCE’s territory (SGIP tracker); see SGIP battery incentives.
Is a battery worth it for your situation?
A starting point, not a verdict. Your installer should model your actual usage and rate before you decide.
| Your situation (utility · usage · backup need) | Battery likely worth it? | Why |
|---|---|---|
| SCE, heavy evening use (AC, cooking, EV charging after 4 p.m.), wants backup | Likely yes | Can shift close to a full battery every day at 27–47¢ a kWh, and adds outage protection — the strongest case. |
| SCE, daytime-heavy use (work from home, daytime AC, pool pump, midday EV), no backup need | Often marginal | Much of the solar is used as it is made, so there is less surplus to store and the yearly value shrinks. |
| SCE, tight budget, no critical backup need | Optional — can wait | Solar-only still cuts the bill; a battery can be added later if usage or rates change. |
| Any utility, frequent PSPS or medical equipment at home | Yes — for backup | The driver is resilience. Value it on keeping power on, separately from the bill math. |
| LADWP, standard R-1A rate, no backup need | Usually not for economics | Exports offset purchases kWh for kWh over the billing period, so storing solar earns almost nothing extra. |
| LADWP, wants outage protection | Maybe — for backup | Buy it for resilience, not for the bill. |
Based on the SCE prices and the worked example above, and LADWP’s net metering rules. PG&E and SDG&E customers are also on the Net Billing Tariff, with their own rates. Estimates, not guarantees.
When solar-only still makes sense
Plenty of homes do fine without a battery. Solar-only tends to pencil out when…
You use power during the day
Work from home, daytime AC, a pool pump or midday EV charging uses solar as it is made, at 24–26¢ avoided, so there is little cheap surplus for a battery to rescue.
Your evening use is small
The worked example assumes 9 kWh used between 4 and 9 p.m. every day. A household that uses half that saves about half as much.
Your budget is tight
A battery adds $10,000–17,000. Solar-only cuts the bill now, and a battery can be added later.
You’re on LADWP
Its standard rate nets exports against purchases, so the self-consumption gain a battery offers on SCE largely disappears. Backup may still justify one.
It’s a different question entirely
LADWP runs its own net metering, not the CPUC’s Net Billing Tariff. On the standard R-1A rate, imports and exports are netted over the billing period, so a kilowatt-hour exported at noon offsets one bought in the evening at the retail price. On the time-of-use R-1B rate exports are credited at the price of their time block, and the summer spread is modest: 35.12¢ High Peak against 26.54¢ Base in July–September 2026 (LADWP). Either way, a battery on LADWP is mostly a backup decision; see LADWP net metering in 2026 and LADWP solar and battery incentives.
Backup value is separate from bill savings
A battery earns its keep two ways: lowering the bill by shifting solar into the evening, and keeping power on in an outage. They don’t have to both win. With medical equipment or frequent PSPS events, backup alone can justify a battery when the bill math is thin. And don’t expect exports to pay for it — on SCE a midday export earns a few cents.
Ask for both scenarios, side by side
Ask your provider to model solar-only and solar + battery on your 12 months of usage and your rate plan, with export credits and the 4–9 p.m. price in the model, then weigh how much backup is worth to you. Five things move the answer:
- Evening use — how many kWh you use between 4 and 9 p.m.; it caps what a battery can shift.
- Rate plan — the gap between the evening price and the midday export credit.
- Battery cost — the installed price after any incentive you actually receive.
- Warranty — years, cycle or throughput cap, and the capacity it guarantees at the end.
- Backup need — PSPS frequency, medical equipment, and what resilience is worth to you.
The bottom line
Under NEM 3.0 a battery is optional. On SCE it pays best in homes that use a lot of power after 4 p.m.: each kWh it shifts is worth 27–47¢, and a battery cycling 10 kWh a day pays back in roughly 7–12 years before incentives. It is a weaker bill case for daytime-heavy homes and on LADWP’s standard rate, and a clear yes whenever backup matters to you. Still weighing the whole solar decision? Start with is solar still worth it in California?
We hold a California C-10 electrical classification (CSLB #1032379) and install solar and batteries across Los Angeles and the San Fernando Valley. We’ll model solar-only and solar + battery on your real usage so you can decide on the numbers.
Frequently asked
Is a battery required under NEM 3.0?
No. The Net Billing Tariff doesn’t require a battery, and solar-only is allowed. It changes the economics: on SCE a midday export earns a 2026 system a few cents, while the same kWh bought between 4 and 9 p.m. costs 45–61¢ on TOU-D-PRIME, so a battery that shifts solar into the evening adds value. It is a choice, not a requirement.
Does a home battery pay for itself under NEM 3.0?
It can, in the right home. On SCE’s 2026 prices each kWh a battery moves from midday export to the evening is worth about 27–47¢ after losses; shifting 10 kWh a day is worth about $1,400 a year, which pays back a $10,000–17,000 battery in roughly 7–12 years. A home that can shift only 5 kWh a day takes about twice as long. The federal credit has ended and SGIP’s general residential budget is closed in SCE territory.
Do I need a battery if I'm on LADWP?
Usually not for the bill. On LADWP’s standard R-1A rate, exports offset purchases kWh for kWh over the billing period, so storing solar earns almost nothing extra; on the time-of-use R-1B rate the gain is small. A battery on LADWP is mostly a backup decision. More in LADWP net metering 2026.
Can I add a battery later instead of at install?
Usually yes — many systems can add an AC-coupled battery afterward. Waiting lets solar-only start saving now and defers the cost until your usage, rates or backup needs change; installing both at once can save on labor and permitting. Check with your installer what your inverter and panel allow.
How much evening use does a battery need to make sense?
Enough to empty it most days. A battery only earns the evening price on energy your home actually uses between 4 and 9 p.m.; our worked example assumes 9 kWh in that window every day. A household that uses half that saves about half as much. Your utility’s interval data shows your real evening use.
Is backup the same as saving money?
No. Bill savings come from shifting solar into the evening; backup is keeping power on in an outage or PSPS. A battery can be worth it for resilience even when the bill math is marginal. See whole-home vs critical-loads backup for how backup is wired.
Related reading
Sources & methodology
Figures on this page come from the primary sources below and, where noted, from Cali Energy calculations using the stated assumptions. Rates, incentives, and program terms change; each was verified October 1, 2026.
- SCE — Time-of-Use residential rate plans (TOU-D-PRIME prices; required for Solar Billing Plan)
- SCE — Solar Billing Plan (average Energy Export Credit values for 2026 systems)
- SCE — Schedule NBT, Net Billing Tariff (ACC Plus bonus by vintage)
- CPUC — Net Billing Tariff
- Tesla — Powerwall 3 datasheet (solar-to-battery-to-home efficiency)
- FranklinWH — aPower 2 datasheet (round-trip efficiency)
- Tesla — Powerwall limited warranty (USA)
- Enphase — limited warranty, US/Canada (IQ Battery)
- FranklinWH — system limited warranty for end users
- NREL / U.S. Department of Energy — Solar Photovoltaic System Cost Benchmarks
- Berkeley Lab — Distributed Solar & Storage: 2025 Data Update
- SGIP — Program metrics and incentive step tracker
- IRS — Residential Clean Energy Credit
- LADWP — Service Rider NEM, Net Energy Metering
Solar-only or solar + battery? Let’s run your numbers
Tell us your utility, rate plan and a recent bill, and we’ll model both options on your real usage — an honest estimate, not a sales pitch. One call: +1-323-844-7777.
Get a free estimatePrepared by Cali Energy, October 1, 2026. This article is for general educational purposes only and is not legal, tax, financial, engineering, or utility advice. Rates, incentives, codes, permit requirements, equipment specifications, prices, and program terms may change; figures and timelines are estimates, not guarantees. Confirm current requirements with the applicable utility, AHJ, program administrator, manufacturer, or a licensed professional. See our Content Disclaimer. Cali Energy · 19201 Parthenia St, Unit E, Northridge, CA 91324 · CSLB #1032379 (B, C-10, C-39)