Net Metering vs Net Billing: What Is Exported Solar Worth?
Understand solar production, direct use, imports and exports. Compare net metering and net billing using the actual tariff and a worked example.
Net metering vs net billing is a comparison of how your utility accounts for electricity you send to the grid. The important question is how the actual tariff values imports and exports over its measurement and billing periods. The program's name alone does not tell you what your solar electricity is worth.
Read this alongside the home solar guide before accepting an annual savings estimate. This is a national explanation; your service territory, enrollment date and approved rate schedule determine the rules that apply.
Distinguish four energy flows
Solar production is everything the array generates. Direct use is the portion consumed in the house as it is generated. Export is the portion sent through the utility meter to the grid. Import is electricity bought from the grid when household demand exceeds the available onsite supply.
Your utility bill generally does not show total solar production because energy used behind the meter may never cross it. Likewise, a small export figure does not establish that the array is producing poorly. Use the inverter or production meter alongside properly configured consumption monitoring to understand the flows.
| Quantity | What it measures | Why it matters |
|---|---|---|
| Production | Total generated kWh | Array performance |
| Direct use | Solar kWh used onsite at the time | Potentially avoided imports |
| Export | kWh sent to the grid | Credit under the export tariff |
| Import | kWh drawn from the grid | Purchases under the import tariff |
Compare the accounting, not just the label
Under arrangements commonly called net metering, eligible exports may offset imports through energy or bill credits using specified rules. The netting interval, time-of-use treatment, credit rollover and treatment of annual surplus still matter. “Net metering” does not always mean every charge disappears or every surplus kWh is paid at retail.
Under arrangements commonly called net billing, imports are charged and exports are credited separately, often at different rates. Export values can vary by hour or season. Some programs use other terms, so ask for the approved tariff and a sample calculation for your proposed system.
Check whether credit applies to all bill components or only selected energy charges. Identify the difference between credits that reduce future bills and cash compensation for a remaining surplus. Neither should be assumed from the heading on a sales proposal.
Work through one hypothetical month
Suppose the home consumes 1,000 kWh and the array generates 1,000 kWh in a month. The home uses 400 solar kWh directly, exports 600 kWh, and imports 600 kWh at other times. Equal monthly production and consumption do not eliminate grid transactions.
Assume a flat avoidable import price of $0.30/kWh and an export credit of $0.05/kWh. Without solar, the variable energy charge would be 1,000 × $0.30 = $300. With solar, imports cost 600 × $0.30 = $180 and exports earn 600 × $0.05 = $30. The remaining variable charge is $150, so the modeled variable bill reduction is $150.
The same result can be viewed as $120 from direct use (400 × $0.30) plus $30 from export. These invented rates and flows are for arithmetic only. Fixed charges, minimum bills, taxes, demand charges, tariff-specific netting and financing are excluded. An eligible one-for-one credit under different rules would produce a different result.
Use a local example without treating it as national policy
California illustrates why enrollment and service territory matter. The CPUC's explanation covers the large investor-owned utility territories of PG&E, SCE and SDG&E. It distinguishes earlier NEM arrangements from the newer net billing tariff, marketed by those utilities as the Solar Billing Plan.
The commission says export credits under that tariff are generally lower than import rates, though they can be higher during some late-summer evening periods. That is a specific program example checked October 30, 2026. It is not a description of every California utility or any other state's rule.
For your account, obtain the utility's current rate documents and eligibility confirmation. Ask what happens after a move, system expansion or equipment change. Do not assume a neighbor's older agreement is available to a new installation.
Ask these tariff questions before comparing proposals
- Which rate plan and export program will this account enter?
- Over what interval are imports and exports measured or netted?
- How do values change by hour, season or enrollment year?
- Which charges cannot be offset by export credits?
- When do credits roll over, expire or settle, and at what value?
- Are there system-size, export, storage or interconnection restrictions?
- Which utility documents support the modeled first-year bill?
Use the same tariff assumptions when learning how to compare solar quotes. If each bidder uses a different electricity-price growth assumption, their long-term savings totals are not directly comparable.
Consider timing and storage without assuming payback
Shifting a flexible load into productive hours may increase direct solar use, but the value depends on the import tariff and the export credit forgone. For an EV, compare daytime solar charging with any cheaper overnight rate, including charging losses and practical availability.
A battery can shift energy from one period to another, but has losses, power and capacity limits, equipment costs and possible replacement needs. Compare a solar-only option with a documented storage scenario. A high evening rate does not by itself establish that the additional equipment is economical.
Keep backup value separate from bill savings. Read solar panels during a power outage for the equipment needed to supply protected loads. Neither an export tariff nor a battery marketing label establishes that capability.
Conclusion
Calculate solar value from direct use, imports, exports and the actual rate schedule. Ask for the netting interval, credit limits and remaining charges so the proposal's savings can be checked rather than accepted as a headline.
Continue exploring our Energy Efficiency guides.
Scott Harding
Scott is the main author of DIY Home Comfort. Learn more about the team and our approach on the About page.
