LADWP Net Metering, Explained for Solar Homeowners (2026)

NEM 3.0 — officially the Net Billing Tariff — was set by the California Public Utilities Commission (CPUC), and it governs the three big investor-owned utilities: SCE, PG&E, and SDG&E. Under it, new solar exports earn a time-varying credit that is usually far below retail — an illustrative 5–8¢/kWh at common midday hours (a few late-summer evening hours are worth much more). That’s what pushed IOU customers toward pairing solar with a battery. Our full breakdown is in NEM 3.0 explained for California.

LADWP is a municipal utility. It’s owned by the City of Los Angeles and governed by the LA Board of Water and Power Commissioners — not the CPUC. The CPUC’s Net Billing Tariff simply doesn’t reach it. LADWP runs its own long-standing Net Energy Metering (NEM) program, and it still credits exported solar more favorably than the IOU Net Billing Tariff (per LADWP’s current rate schedule) — the kind of arrangement IOU customers largely lost. (Confirm the current LADWP tariff before you sign; a municipal utility can change its own rules, but as of 2026 this more retail-like structure stands (confirm the current schedule).)

1. You use what you can on-site. When the panels are producing, your home draws from the array first. Every kWh you self-consume is a kWh you don’t buy from LADWP at retail — the biggest source of savings for any solar owner.

2. Surplus flows to the grid and earns a credit. When you produce more than you’re using, the excess exports to the grid and your account is credited more favorably than under the IOU Net Billing Tariff (per LADWP’s current rate schedule). Because that credit is relatively strong, exporting a kWh at noon helps offset a kWh you pull back after sunset far more effectively than under SCE’s NEM 3.0 — though the exact offset depends on LADWP’s current rate schedule and billing rules.

3. It’s netted over a bi-monthly period. LADWP bills residential customers bi-monthly — roughly every 60 days, not monthly. Your production and consumption are netted across that window, so a sunny stretch can offset a cloudier one within the same bill.

4. Leftover credits carry forward. If you export more energy than you use in a period, the surplus kWh credit rolls forward to future bills. What credits can’t do is erase the minimum charge or other non-energy line items — there’s a small monthly minimum (on the order of ~$10) that stays on the bill even for a heavy over-producer. Verify the exact minimum and true-up terms on your current LADWP tariff.

LADWP’s program is designed to zero out your energy charge, not to write you a check. Surplus kWh credits carry forward to offset future energy usage, and reporting on the program indicates such credits generally carry forward, though the exact expiration and surplus treatment depend on your applicable LADWP schedule — confirm the current rules. Two limits matter: credits can’t be applied to the minimum charge or non-energy fees, and LADWP does not cash out a large surplus — any unused balance when you close the account stays with the utility. The practical takeaway: size your system to your usage, not far beyond it. A system built to wildly over-produce banks credits you may never fully use. Our how many panels do I need guide walks through right-sizing.

Every home is different, so treat the following as an illustrative scenario, not a guarantee. Say a Los Angeles home uses about 700 kWh a month at a blended LADWP retail rate in the low-to-mid 20¢-per-kWh range (rates vary by tier and season — roughly $0.22–$0.34/kWh; confirm your current tariff). A solar-only system sized to that usage can offset the large majority of the energy portion of the bill, because exports are credited more favorably than under NEM 3.0 (per LADWP’s current schedule) — while the bi-monthly minimum charge and any non-energy fees remain. The same physical system on SCE’s NEM 3.0 would offset less unless paired with a battery, since midday exports there earn far below retail. To model your own payback with your real usage and rate, use our California solar payback calculator.

One important 2026 note that applies regardless of utility: the 30% federal solar tax credit ended December 31, 2025 for owner-bought (cash or loan) systems, so today’s sticker price is the real price — details in the 30% credit ended, explained. That makes right-sizing and a fair install price matter more than ever, on LADWP or anywhere.