Start with your actual electricity provider and tariff. For PG&E, SCE and SDG&E, the Solar Billing Plan generally applies to new interconnection applications from April 15, 2023. Older systems and other utilities can have different terms. Never assume a neighbor’s savings calculation applies to you.
Identify the account you are modeling
Collect a recent bill and enough usage history to capture the year’s seasonal pattern. Record the utility, rate schedule and any community choice electricity provider shown on the account. If you already have solar, find the interconnection date and current solar tariff.
The CPUC’s explanation of standard Net Billing covers PG&E, SCE and SDG&E. Municipal utilities and other providers need their own tariff check. The phrase “NEM 3.0” is commonly used for Net Billing, but the precise program name and account terms are more useful than the nickname.
Before changing an existing system, ask the utility how the proposed alteration affects interconnection and tariff eligibility. An older account should not be modeled as a new installation without that check.
Separate three energy flows
| Energy flow | What happens | What to verify |
|---|---|---|
| Use solar at home | Generation supplies loads instead of importing that energy. | When the household uses electricity and which import charges are avoided. |
| Send surplus to the grid | Exported generation receives credits under the account’s tariff. | The export schedule and its time-dependent values. |
| Buy electricity from the grid | The utility supplies energy when the home needs more than the system provides. | Import rates, time periods and charges that remain on the bill. |
Under the Solar Billing Plan, export credits are usually lower than retail import prices, with some higher-value periods. Generating as much electricity as you use annually therefore does not automatically mean a zero bill.
That is why annual kWh alone is insufficient for a savings estimate. The timing of household use and generation affects the outcome.
What a battery changes
Storage can move some solar energy from daytime to another time. Its financial value depends on the difference between relevant import and export values, battery losses, operating limits, the household’s usage and the installed cost.
Request two estimates with matching assumptions: solar alone and solar plus storage. Show storage’s incremental cost and modeled bill effect separately. If backup is also a goal, request its equipment scope and operating reserve separately from the bill-savings calculation.
A larger battery is not automatically the better financial choice. Have the bidder explain how much usable energy will be cycled, why that capacity fits your usage, and what changes if your habits differ from the model.
Read the date on every incentive claim
Federal residential credit: before comparing prices, remove any 30% federal residential credit assumed for equipment first put into service in 2026. IRS eligibility for that credit ends with the 2025 installation period. An older proposal can therefore understate what a new homeowner-owned system will cost.
This statement concerns the residential credit described by the IRS. It is not a conclusion about every business, leasing or tax arrangement. Existing unused credits and individual tax circumstances are separate questions for a qualified tax adviser using the current IRS guidance.
California storage programs: SGIP has specific eligibility categories and application processes. Ask which category is proposed, who administers it, whether funds are available and whether a reservation has actually been secured. An expected incentive is not the same as a confirmed award.
For any proposed discount, record the source, eligibility assumptions and date checked. Obtain a no-incentive total as well, so the project cost remains clear if an assumption changes.
What a useful savings estimate contains
Ask the bidder to show the inputs
- The actual utility tariff and date of the rate assumptions.
- The household usage data used, including time of use where available.
- Proposed system capacity, production model and shading assumptions.
- Import and export values treated separately.
- Battery capacity, losses, schedule and backup reserve if included.
- Remaining utility charges and any annual reconciliation assumptions.
- Cash price, financed cost and financing terms shown separately.
- Each incentive identified with eligibility and confirmation status.
- Future electricity price increases and household load changes labeled as assumptions.
Ask for a second scenario using more conservative assumptions. A project should be understandable even when the most optimistic forecast is removed.
Before signing, read the California Solar Consumer Protection Guide and compare the provider’s financial disclosure with the sales presentation. Differences need an explanation.
Sources & scope
Product performance, site conditions and individual eligibility require their own verification.
- California Public Utilities Commission: Net Energy Metering and Net Billing
- California Public Utilities Commission: California Solar Consumer Protection Guide
- Internal Revenue Service: Residential Clean Energy Credit
- California Public Utilities Commission: Self-Generation Incentive Program
Will solar work in a power outage?
Panels make electricity. A backup system decides where that electricity can go when the grid is unavailable.