Data approachEIA rates · NREL sun hours · 2026 federal policy · methodology
Net metering lets a solar owner send surplus electricity to the grid and receive a bill credit for it, but how much that credit is worth depends on your state and your utility. Some states still credit exports close to the retail rate. Others have moved to net billing or fixed export rates that pay far less. This guide explains the main credit structures, which states have changed their rules, and what to verify before you sign a solar contract.
The rules are moving quickly. According to the NC Clean Energy Technology Center’s 50 States of Solar report for Q2 2026, 45 states plus Washington, D.C. and Puerto Rico took some kind of distributed solar policy action that quarter, and net metering was the most common topic, with 53 actions. At the same time, the federal 25D residential clean energy credit ended for expenditures after December 31, 2025, so state export rules and your utility’s tariff now matter even more when you compare quotes.
Last reviewed October 2, 2026. Net metering tariffs change often, so treat this guide as a starting point and confirm details with your utility.
⚖️ Policy & Net Metering
How Net Metering Credit Rates Actually Work
The most important number in any net metering policy is what you are credited for each kilowatt-hour (kWh) you export. Policies generally fall into three structures.
Traditional net metering credits each exported kWh against the kWh you later buy, usually at or near the retail rate and usually over a monthly billing period, with unused credits rolling forward. If your retail rate is 18¢/kWh, an exported kWh offsets roughly 18¢ of future usage.
Net billing, often called a successor tariff, values exports separately from the power you buy, frequently at a lower rate. NCCETC analysts have noted that net billing tariffs typically net energy over intervals that range from instantaneous to hourly, rather than the monthly interval used in standard net metering. That matters because midday solar output is credited at the export rate instead of offsetting your evening usage. Our guide to net metering vs feed-in tariffs covers how these approaches differ from wholesale-style buyback programs.
Fixed-rate or avoided-cost buyback pays a set export rate tied to what the utility would otherwise pay for power. Where no statewide net metering mandate exists, as in Texas, each retail electricity provider decides what, if anything, it pays for exports, and plans vary widely.
Retail rates differ enormously by state, and under retail-style credits that difference flows straight into the value of each exported kWh. EIA data for June 2026 puts the U.S. residential average at 18.34¢/kWh, with Hawaii at 52.72¢ and Nevada at 13.11¢.
Data visualization
Retail electricity prices span 13.11 to 52.72 cents per kWh. Hawaii pays about 4 times Nevada’s rate, versus an 18.34 cent U.S. average in June 2026. Source: EIA Electric Power Monthly, Table 5.6.A, 2026.
Chart summary: Residential electricity prices in June 2026 ranged from 13.11¢/kWh in Nevada to 52.72¢ in Hawaii, about a fourfold gap, with California (34.74¢) and Massachusetts (29.61¢) also well above the 18.34¢ national average. Where exports are credited near retail, those high rates make each exported kWh more valuable. Where exports earn a lower fixed or avoided-cost rate, a high retail price makes the gap between what you buy and what you sell even wider.
Here is a simple hypothetical to show why the structure matters (these are assumed numbers, not state data). A home that exports 3,000 kWh a year earns $750 in credits at 25¢/kWh but only $240 at 8¢/kWh, a difference of $510 every year from the credit rate alone. Running a solar net metering calculator with your utility’s actual export rate is the fastest way to see your own version of that gap.
⚖️ Policy & Net Metering
States Still Crediting Exports Near Retail Rates in 2026
A number of states have historically credited residential exports at or near the full retail rate. Because many of them are reviewing their programs, treat the list below as a snapshot and confirm the current tariff for your utility.
Massachusetts pairs one of the highest residential rates in the country (29.61¢/kWh in June 2026) with retail-based net metering credits for most small residential systems. Utility-specific caps and the state’s separate SMART incentive program can affect what a new applicant actually receives, so ask your installer which programs are open in your service territory.
New Jersey has long credited residential exports at retail through its net metering rules, and its residential rate was 24.95¢/kWh in June 2026. Its older SREC-II incentive closed to new projects and was replaced by the Successor Solar Incentive program. NCCETC counted New Jersey among the states with the most distributed solar policy actions in Q2 2026, so check for updates before you sign. Our guide to solar panel payback period by state shows how local rates and incentives shift the timeline.
Colorado state law allows net metering for systems sized up to 120% of a customer’s average annual consumption, which helps households that are adding electric vehicles or heat pumps. Coverage depends on the utility, and NCCETC reported in 2025 that Colorado Springs Utilities proposed separate rates for net metering customers, so municipal and co-op territories can differ from investor-owned utilities.
Vermont bases its net metering credit on each utility’s blended residential rate, with adjustments for factors such as siting, so the exact credit depends on your utility and project type.
Florida shows how quickly the picture can change. In 2022 the legislature passed a bill that would have phased down net metering credits for new customers, but the governor vetoed it, and the Public Service Commission’s existing rules remained in place. Utilities in the state have argued that net metering shifts costs to non-solar customers, so the issue could return.
Across all of these states the pattern is the same: high retail rates and legislative protection have kept retail-style credits in place so far, but NCCETC’s data shows pressure on net metering in nearly every state.
⚖️ Policy & Net Metering
States Where Net Metering Has Been Cut or Is Under Pressure
NCCETC reported in early 2025 that roughly one-third of states offer an alternative to traditional net metering, and the list of changes has grown since. The table summarizes verified changes in several states.
State
What changed
What it means for new customers
California
Net Billing Tariff (NEM 3.0) applies to applications after April 15, 2023; CPUC Decision 22-12-056
Average export value about 75% lower than NEM 2.0; NEM 2.0 customers grandfathered for 20 years
Illinois
Supply-only net metering for systems interconnected after Jan. 1, 2025
Credits apply to supply charges only, plus a $300/kW distributed generation rebate; legacy customers keep prior terms
Nevada
PUCN approved 15-minute netting and daily demand charges for NV Energy in September 2025
Less value from banked credits; advocates say it conflicts with 2017’s SB 405
Hawaii
Closed traditional net metering to new customers in 2015
Newer programs credit exports at fixed rates well below retail
Maryland
2026 legislation requires a successor to full-retail net metering
Details and timing are still being set; check Maryland PSC
Connecticut
Legislators mandated a net metering successor program in 2026
Program must be finalized by April 2028
Virginia
Regulators issued a decision on Dominion Energy’s net metering successor in Q2 2026
Shift toward net billing for Dominion customers
West Virginia
Regulators approved net billing for Appalachian Power and Wheeling Power in 2025
Lower export credits than traditional net metering
California’s shift is the most closely studied example. Its new tariff credits exports based on the time they are delivered and the utility’s avoided costs rather than the retail rate, so the program favors solar-plus-battery systems that move energy into the evening. At 34.74¢/kWh in June 2026, California’s retail rate remains the second highest in the country, which is why the export-versus-retail gap there is so large.
Illinois is a good example of why you should not rely on older articles. The 2021 Climate and Equitable Jobs Act extended full retail net metering only through the end of 2024, and new customers since January 1, 2025 receive supply-only credits instead.
Maryland has also moved. The state previously offered full retail credits, but lawmakers in 2026 directed regulators to adopt a successor program that is expected to pay less, and Maryland’s statewide net metering limit is 3,000 MW.
Data visualization
Net metering led all solar policy topics with 53 actions in Q2 2026. Community solar followed with 48 and residential fixed charges with 45. Source: NC Clean Energy Technology Center, The 50 States of Solar, Q2 2026.
Chart summary: In Q2 2026, NCCETC counted 53 net metering policy actions across the country, more than for community solar (48) or residential fixed charge and minimum bill increases (45). Together with 284 total distributed solar actions that quarter, it shows that net metering rules are the single most active area of solar policy, which is why the credit you read about last year may not be the credit you receive today.
⚡ System Size
Capacity Caps, Carryover Rules, and System Size Limits
Beyond the credit rate, a few secondary rules can change the value of a residential system.
System size limits are usually set as a percentage of your annual consumption or as a fixed kW ceiling. Colorado, for example, allows systems up to 120% of annual consumption under state law. If you plan to add an electric vehicle or heat pump, ask whether the utility will let you size for that future load.
Aggregate caps limit how much total solar capacity a utility or state will accept under its net metering tariff. Maryland’s statewide net metering limit is 3,000 megawatts, and Maryland’s legislature has tracked projects waiting for capacity against that limit. When a cap is reached, new applicants may be pushed to a successor program, so ask your installer where the queue stands.
Netting interval and rollover rules decide how much of your production is credited as an offset. Traditional net metering usually nets over a month, while net billing can net by the hour or even every 15 minutes, as Nevada’s 2025 decision does for NV Energy. Illinois credits for new customers apply only to supply-related charges, not delivery charges. Always ask what happens to leftover credits at the end of a billing year.
Fixed charges and minimum bills also cut your savings no matter how generous the credit is. NCCETC counted 45 actions on residential fixed charges or minimum bills in Q2 2026 alone, so check whether your utility’s tariff for solar customers includes added monthly or demand charges.
Using a solar payback calculator with your actual utility’s tariff, not just a state average, is the most reliable way to turn these variables into a real timeline. Where exports earn well below retail, a battery storage calculator can show whether storing midday power for the evening is worth the added cost.
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⚖️ Policy & Net Metering
What Net Metering Policy Changes Mean for Your Solar Decision
If you are evaluating solar in 2026, the direction of net metering policy matters almost as much as the current rules, because a system can operate for 25 years or more. NCCETC’s 2025 and 2026 reports describe a steady shift toward successor programs that usually pay less for exports than the programs they replace, although many states protect existing customers through grandfathering.
The federal picture changed too. The 30% Residential Clean Energy Credit (Section 25D) ended for expenditures after December 31, 2025, under the One Big Beautiful Bill Act signed in July 2025. Homeowner-owned systems installed in 2026 do not qualify, and the credit can only be claimed on a 2025 return for systems placed in service by that date. Some third-party-owned systems, such as leases or power purchase agreements, may still be supported by commercial credits under different rules, so ask your installer and a tax professional how a specific offer is structured.
Use this checklist when comparing quotes:
Identify the tariff. Ask whether you would be on traditional net metering, net billing, or another export tariff, and get the name in writing.
Find the export rate and netting interval. Know what each exported kWh earns and whether energy is netted monthly, hourly, or in shorter intervals.
Confirm caps and queues. Ask whether a system-size limit or an aggregate cap could affect your application.
Understand grandfathering. California NEM 2.0 customers keep their terms for 20 years from interconnection, and Illinois legacy customers keep theirs for the life of the system. Ask whether your protection transfers if you sell your home.
Add up fixed and demand charges. These reduce savings under any credit structure.
Model the battery. Compare your numbers with and without storage using your actual tariff.
Finally, run your own numbers before you sign anything. A solar ROI calculator that uses your state’s export credit, your local retail rate, and a conservative rate-escalation scenario will give you a far better answer than any statewide average.
Sources and methodology
This guide was audited on October 2, 2026. Policy statements draw on the NC Clean Energy Technology Center’s 50 States of Solar reports (Q1 2025, Q3 2025, 2025 annual review, and Q2 2026) as reported by NCCETC, Solar Power World, and CleanTechnica; the California Public Utilities Commission’s Decision 22-12-056; the Maryland General Assembly’s 2026 fiscal notes on net energy metering; the Citizens Utility Board and Solar Power World on Illinois’ Smart Solar Billing; the Florida Senate’s 2022 bill summary for CS/CS/HB 741 and SB 1024; and the Public Utilities Commission of Nevada’s September 2025 order as reported by Solar Power World. Electricity prices come from the U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A, June 2026. The federal 25D status reflects the One Big Beautiful Bill Act and IRS Form 5695 guidance. Hypothetical examples are labeled as such and are not state data.
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Net metering is a billing arrangement that credits solar owners for electricity their system sends to the grid. The credits offset power you later draw from the utility and usually roll forward month to month. Under traditional net metering the credit is at or near the retail rate. Under net billing, exports earn a lower rate and are often netted by the hour or in shorter intervals.
It depends on your state and utility, and policies keep changing. Massachusetts, New Jersey, Colorado, and Vermont have historically credited exports at or near retail, while California, Illinois, Nevada, and Hawaii have moved to lower-value structures. Maryland, Connecticut, and Virginia are building successor programs. Confirm the current tariff with your utility or the NC Clean Energy Technology Center's 50 States of Solar reports.
It can be, but the math changed. The 30% residential clean energy credit (25D) ended for expenditures after December 31, 2025, so homeowner-owned systems installed in 2026 do not qualify. Whether solar pays off now depends on your retail rate, your export credit, and your installed price. Model it with your utility's actual tariff, and ask a tax professional about any third-party ownership options.
Successor programs usually apply to new customers, and existing customers are typically grandfathered, but the length varies. California NEM 2.0 customers keep their terms for 20 years from interconnection, and Illinois legacy net metering customers keep their benefits for the lifetime of their systems. Ask your installer for the written tariff, the grandfathering terms, and whether they transfer if you sell the home.
Not always, but batteries help most where exports earn far less than retail. A battery lets you use more of your own solar power in the evening instead of exporting it cheaply. Where credits are near retail, the grid already acts as free storage and a battery adds less value. Run both scenarios in a battery storage calculator using your actual tariff.
$150/month electric bill by state
System size and payback vary by electricity rate and sun hours — see your state.
18.19¢/kWh — US average residential price. Source: EIA Electric Power Monthly, Table 5.6.B (year-to-date through July 2026), residential average retail price (July 2026) (EIA)
Solar production
4.5 peak sun hours/day × 0.82 system derate. Approximate state-average daily solar resource (peak sun hours) based on NREL solar resource data (NSRDB); not location-specific — use NREL PVWatts for an address-level estimate. (NREL PVWatts)
Installed price
$3.00 per watt before incentives. Blended 2026 US residential installed price used by this site; EnergySage marketplace reported about $2.60/W (mid-2026); full-market medians are higher.
Federal tax credit
$0 for homeowner-owned systems installed in 2026 — the 30% §25D credit ended Dec 31, 2025 (IRS)
Net metering
National blend — solar assumed to offset 75% of the bill (87% in full-retail net-metering states, 55–70% elsewhere).
Estimates only — not tax, legal or financial advice. Get at least three installer quotes and confirm incentives with your utility and a tax professional.