NEM 3.0 Battery Payback by Utility: Export Rates, Round-Trip Math & Payback (2026)

With the federal residential solar tax credit (Section 25D) gone, battery payback under NEM 3.0-style net billing comes down to pure rate math: your utility's export credit versus your retail rate. That single spread decides whether a battery pays for itself. This guide breaks down the export-credit landscape utility by utility, walks through the round-trip-efficiency math that quietly taxes every cycle, and shows worked payback examples for California, Arizona, Nevada, New York, and Massachusetts. To see your own policy at a glance, start with our NEM Policy Tracker.

How net billing changed the battery math

Under full retail net metering, a battery mostly shifts consumption — you use your own solar instead of selling it, and the export rate barely matters because it equals retail. Under net billing (NEM 3.0 in California, net billing in Arizona, the VDER Value Stack in New York), the rules flip. Your exports are credited at 25–75% below retail, so the battery's job becomes two things:

• Avoid buying retail kWh at peak TOU rates. Store midday solar and discharge it during the expensive 4–9pm window instead of buying from the utility.
• Time-shift solar into high-value evening hours. Exporting at midday (when export credits are lowest) is a poor trade; discharging stored solar at peak replaces your most expensive kWh.

The catch is round-trip efficiency. A modern LFP battery returns roughly 85–90% of the energy you put in; the other 10–15% is lost as heat and conversion loss. Every shift is taxed by that loss, so the gap between your retail rate and the export credit must clear the round-trip hurdle before storage adds value. In California's $0.30+/kWh gap it clears easily. In a low-export-credit, flat-rate territory it may not.

Per-utility export rates: the comparison table

This is the data that decides your payback. Export credits below come straight from utility tariffs, DSIRE, and PUC filings, compiled in our net-metering dataset (verified June 2026). The U.S. average residential retail reference is 18.44¢/kWh (EIA Electric Power Monthly, May 2026).

State deep-dives

California (NEM 3.0)

PG&E, SCE, and SDG&E credit exports at avoided cost — roughly $0.05–0.10/kWh, varying hourly via the Avoided Cost Calculator — against retail rates of $0.30–0.40/kWh. That gap is the widest in the country, which is why a battery is near-essential under NEM 3.0: every stored kWh you discharge at peak replaces a $0.40 purchase instead of earning a $0.08 export credit. Stacking California's SGIP rebate and VPP programs pulls payback well below the standalone ~12–14 year figure. See our California NEM 3.0 Survival Guide and VPP Program Finder.

Arizona

Arizona ended retail net metering in 2017 and runs explicit net-billing export rates: APS at ~$0.0617/kWh (declining ~10%/yr, resets September 1), SRP far lower at ~$0.0187/kWh on its standard plan, and TEP at ~$0.0513/kWh (resets September 1). These low export credits make Arizona batteries an evening-shift play — you store solar to avoid buying peak retail power, not to earn much from exports. Self-consumption is the whole game.

Massachusetts

Massachusetts still offers retail net metering plus the SMART incentive (~$0.25–0.30/kWh combined) across Eversource, National Grid, and Unitil. That makes Massachusetts battery economics better than California's on paper — you're not forced to arbitrage to survive. The state's ConnectedSolutions VPP pays you for dispatching capacity during peak grid events, adding clean revenue on top. See our Battery Rebates by State guide.

Nevada

Nevada's AB 405 restored net metering on a declining ladder at ~95% of retail, stepping down annually (currently ~$0.09–0.11/kWh) under NV Energy. Because export credits stay close to retail, Nevada homeowners get much of the old-school solar value without a battery — though a battery still helps for TOU arbitrage and resilience.

New York

New York uses the VDER Value Stack (~$0.04–0.10/kWh for the export component) for larger systems, but small residential systems (<25 kW) can elect retail net metering. That dual track means battery value varies sharply by system size and utility (ConEd, National Grid, NYSEG, RG&E). Small residential solar often doesn't need a battery for export economics; larger or commercial systems do.

Stacking makes it work

The honest answer to "is a battery worth it under NEM 3.0?" is only when stacked. Arbitrage alone rarely clears 12–14 years, but layering these on top turns the math positive:

• State rebates. California SGIP and other state programs cut your upfront cost directly. See Battery Rebates by State.
• Virtual Power Plant income. Utilities pay you to dispatch your battery during grid peaks — often $200–$600/yr. See VPP Enrollment Guide and the VPP Program Finder.
• TOU arbitrage + resilience. Avoiding peak-rate purchases and having outage backup are real, if harder to quantify, benefits.

Note: with the federal residential ITC (Section 25D) expired, there is no $0 federal credit to apply to a new owned residential battery. State programs and VPP revenue now carry the incentives side of the equation.

When a battery is (and isn't) worth it

• Worth it: California IOU territory on a TOU plan (huge retail/export gap); outage-prone areas (PSPS, hurricanes); anywhere with SGIP/ConnectedSolutions plus a VPP; large daily consumption you can time-shift.
• Marginal: Flat-rate plans with no TOU spread; Nevada/retail-NEM territory where exports already pay near-retail; homes that rarely lose power.
• Not worth it (yet): Low retail-rate states with no TOU and no rebate, where the round-trip loss eats the small arbitrage spread.

Sizing matters as much as geography. A battery that's too small won't cover your peak window; one that's too large never cycles. Use our Battery Sizing for TOU Arbitrage guide and the Battery Storage tool to right-size for your rate plan.

Frequently asked questions

What is NEM 3.0's export credit?

Under California's NEM 3.0 (Net Billing Tariff), exported solar is credited at an avoided-cost rate of roughly $0.05–0.10/kWh, varying hourly and set by the Avoided Cost Calculator — far below the ~$0.30–0.40/kWh retail rate. That's why solar-only systems export at a steep discount and batteries became near-essential.

Is a battery worth it under NEM 3.0 in 2026?

Rarely on arbitrage alone — battery-only payback runs ~12–14 years. Batteries earn their keep when you stack TOU arbitrage, SGIP/state rebates, VPP income, and backup value. With the federal residential ITC gone, state programs like California SGIP and Massachusetts ConnectedSolutions carry much of the economics.

How does round-trip efficiency affect payback?

Every charge/discharge cycle loses ~10–15% of the energy (85–90% round-trip efficiency). That loss taxes every kWh you shift, so the gap between your retail rate and the export credit must clear the round-trip hurdle before a battery adds value. In California's $0.30+/kWh gap it clears comfortably.

Which states still have retail net metering?

Several. Massachusetts offers retail net metering plus SMART (~$0.25–0.30/kWh); Nevada's AB 405 pays ~95% of retail; and many municipal utilities like LADWP and SMUD still offer 1:1 retail net metering. California's IOUs (PG&E, SCE, SDG&E) moved to NEM 3.0 net billing in April 2023. See the per-utility table above.

Methodology & Sources

Export-credit rates and net-metering policies in the table are drawn from utility tariffs, DSIRE, and state PUC filings as compiled in our net-metering dataset (DSIRE, utility tariff filings, state PUC orders (verified 2026), last updated 2026-06). Export credits vary hourly, by season, and by rate schedule — always verify the exact value on your utility bill. The U.S. retail reference (18.44¢/kWh) is the EIA Electric Power Monthly Table 5.6.A, May 2026 national residential average. Battery round-trip efficiency (~85–90%) and installed-cost ranges (~$1,300/kWh) reflect current LFP equipment pricing and installation data; worked payback examples are illustrative and assume one full cycle/day. The federal residential ITC (Section 25D) expired December 31, 2025 and is not applied.

Also interested in

• NEM Policy Tracker — look up your state's current net-metering policy
• Battery Payback Calculator — post-ITC battery economics for your state
• Battery Storage ROI Analyzer — size and model your system
• VPP Program Finder — find Virtual Power Plant programs near you
• NEM 3.0 Survival Guide (California)
• Battery Sizing for TOU Arbitrage
• Best Home Batteries 2026 — which battery to buy: spec-verified rankings
• Peak-Rate Avoidance Math
• California NEM 3.0 2026 Economics Guide