Does solar add value to a California home under NEM 3.0?

What NEM 3.0 actually changed

The California Public Utilities Commission (CPUC) adopted the Net Billing Tariff in Decision D.22-12-056 on December 15, 2022. People call it NEM 3.0. The utilities call it the Solar Billing Plan. It applies to customers of PG&E, Southern California Edison and San Diego Gas & Electric who applied to connect a system on or after April 15, 2023.

The big change is what your roof earns when it sends power back to the grid. Under the older net metering plans, exports earned credit at close to the retail rate. Under net billing, export credits follow the utility's avoided cost, hour by hour. The CPUC says those credits are usually lower than retail rates, though they can run higher on late summer evenings. Your rooftop now sells power a bit like a lemonade stand at noon, when everyone on the block already has lemonade.

Net billing customers also go on an electrification time-of-use rate. The CPUC says the original customer who connects a system under net billing is guaranteed that plan for nine years.

The rules have held up in court. A state appeals court upheld the CPUC's decision in March 2026 after the California Supreme Court sent the case back for a second look in 2025. Customers of city-owned utilities, such as SMUD in Sacramento or LADWP in Los Angeles, follow their own utility's solar program, so check with yours.

Older systems keep their plan, and it can move with the house

Homes that connected solar before the switch are often on NEM 1.0 or NEM 2.0. The CPUC says NEM 2.0 customers may stay on that plan for 20 years from the date they interconnected.

When the house sells, the CPUC's 2014 decision that created the 20-year transition period says a system does not lose it when it transfers to a new owner at the same location. A 2025 proposal in AB 942 that would have moved homes onto the newer plan at sale was taken out of the bill in a Senate committee. So a buyer of a legacy home generally inherits the years left on the clock, not a fresh 20.

Hypothetical: a system interconnected in 2018 would run on its legacy plan until 2038. A buyer in 2026 gets about 12 years of it. A system connected in 2020 gets about 14. Those are different products, even if the panels look identical from the curb.

For a net billing home, note that the CPUC describes the nine-year guarantee as belonging to the original customer. A buyer should ask the utility what carries over. Your utility, not the appraiser, is the final word on which plan an account is on.

Ownership comes first, then the billing plan

Before any of this matters, I need to know who owns the panels. Fannie Mae says panels that are leased from or owned by a third party are personal property and are not included in the appraised value. That covers most leases and power purchase agreements (PPAs). I cover the details, including separately financed systems, in solar panels, owned vs leased.

If the system is owned, the billing plan becomes part of the story. Two houses with the same 6 kW system can give a buyer very different monthly bills: one on a legacy plan with years left, one on net billing with no battery. Buyers who do the math may pay differently for them. Some buyers never ask. That is why I measure instead of assume.

Batteries. The CPUC's own FAQ says solar paired with storage pays back faster and saves more under net billing than solar alone, because stored power can be used in the evening instead of exported at a low credit. An owned battery is another feature on the grid. A leased one follows the same personal property rule as leased panels.

How I measure what buyers pay for solar

Fannie Mae's appraisal rules are clear. An appraiser may not adjust for solar dollar for dollar from the equipment and installation cost. The appraiser must analyze how the market reacts to the feature. The cost or income approach can support that analysis, but cannot replace it. Fannie Mae also says the value of energy features varies with climate and utility costs.

That fits California. A system in hot inland Fresno or Riverside County may matter more to buyers than the same system under the fog in San Francisco. Here is how I build the evidence:

1. Paired sales. Similar homes close in time, one with owned solar and one without.
2. Plan against plan. Where there are enough solar sales, I compare legacy-plan homes with net billing homes, and homes with and without batteries.
3. The wider market. A rate found on one street has to hold up across a bigger set of sales before I trust it.
4. Recent sales first. Utility rates and buyer habits change. I test the most recent window the sales can support.

When there are not enough sales to measure, a careful report says so. A guess with a spreadsheet is still a guess. More on the method: paired sales analysis.

What to hand the appraiser

• Ownership proof: the purchase contract and paid-off loan, or the lease or PPA if there is one
• Any UCC filing and payoff letter if the system was financed
• The Permission to Operate letter or another record of the interconnection date
• A recent electric bill that shows which plan the account is on
• System size in kilowatts (kW) and battery size in kilowatt-hours (kWh)
• Production data from the monitoring app, ideally a full year
• Warranties on panels, inverter, battery and roof work, and whether they transfer

Agents, put the plan and the interconnection year in the listing remarks. It helps buyers, and it helps the next appraiser who uses your sale as a comp. If you need a value that shows the work, see my California appraisal services. Tax or rate questions belong with your CPA and your utility.

What I see in the field

Owners often know their system size but not their billing plan. They say "I have solar" the way people say "I have a car." It matters whether it is paid off and how many miles are left.

The second thing I see is surprise at the number. Owned solar can add value, but it rarely matches the install price. That is normal. A new roof does not appraise at its invoice either.

The third is panic about NEM 3.0. Some sellers assume it made solar worthless. It changed the math for new systems. It did not erase the value buyers place on lower bills. How much buyers still pay in your neighborhood is a question for the sales, and the sales usually have an answer if someone bothers to ask them.