Two homeowners can install the exact same solar array, in the same month, for the same price, and end up with wildly different savings, purely because of the net metering policy in their state. Net metering is the rule that decides what your utility pays you for the power your panels send back to the grid, and it is the single biggest lever on solar payback after the price of the system itself. It is also changing fast: California overhauled its rules, and other states are revisiting theirs. This guide explains how export credits actually work in 2026, the three main policy models you will encounter, and exactly what to verify before you sign a solar contract.
What net metering actually does
Your solar panels produce the most at midday, often more than your home uses at that moment. The surplus flows back onto the grid. Net metering is the accounting system that gives you credit for those exported kilowatt-hours, which you then draw down at night or on cloudy days when you pull power from the grid. The crucial question, the one that determines your bill, is how much each exported kilowatt-hour is worth. That is where the policy models diverge.
The three policy models you will meet
- Full retail net metering: every kilowatt-hour you export is worth exactly what a kilowatt-hour costs you to buy. Your meter effectively spins backward, and a kilowatt sent at noon offsets a kilowatt pulled at midnight one-for-one. This is the most generous model and the one that produces the fastest payback.
- Net billing (avoided-cost or 'value of solar'): exports are credited at a lower rate than retail, often close to what it would cost the utility to generate that power itself. You still get paid for exports, just less, which weakens the case for sending power to the grid and strengthens the case for storing it.
- Buy-all, sell-all or no compensation: in a few markets, all your production is sold to the utility at one rate while you buy all your consumption at another, or there is little to no credit for exports at all. Here, self-consumption is everything.
Why the model changes your whole system design
Under full retail net metering, the grid acts like a free battery: you bank summer surpluses and spend them in winter, and there is little reason to buy physical storage just for economics. Under net billing, that logic flips. When exports are worth two or three cents but evening grid power costs you thirty, the value of holding onto your own solar with a battery climbs sharply. This is why the states that cut export rates have seen battery attachment rates jump. The policy did not kill solar; it changed the optimal system from panels-only to panels-plus-storage.
Time-of-use rates compound the effect. Many utilities now charge more for electricity in the late-afternoon and evening peak, exactly when your panels are winding down. With a battery, you charge from cheap midday solar and discharge during the expensive peak, sidestepping both the high import price and the low export credit. The federal Residential Clean Energy Credit covers 30% of the battery cost, which materially improves that math.
Grandfathering: the clause that protects your deal
When a state changes its net metering rules, existing solar customers are usually 'grandfathered' onto the older, more generous terms for a fixed number of years. That makes the timing of your installation genuinely consequential: connecting before a rule change can lock you into better export credits for a decade or more. It also means the date your interconnection application is approved, not the date you first call an installer, is often what counts. If your state is mid-review, ask your installer precisely which tariff you would be locked into and for how long.
How to read a solar quote with this in mind
A reputable installer models your savings using your actual utility's current tariff, not a national average. Ask to see the assumptions: the export rate, the import rate, any time-of-use structure, and whether the projection assumes full retail net metering that may not survive a pending review. If a quote shows a suspiciously fast payback, the export-rate assumption is the first place to look. A conservative quote that uses the rate you will actually receive is worth more than an optimistic one built on a tariff that is about to change.
Net metering is the invisible half of a solar quote. Two identical systems in two states can pay back in seven years or fourteen, and the only difference is what the meter does with your exports.
The Renovation Register Team
The takeaway for 2026: solar still pays in most of the country, but the era of assuming full retail net metering everywhere is over. Find out which model your utility uses, factor in any pending changes and the grandfathering window, and decide whether a battery belongs in the system based on your real export rate and time-of-use prices. Pair the system with the 30% federal Residential Clean Energy Credit, and let the local net metering rules, not a salesperson's national average, set your expectations for payback.
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