Net billing is a solar compensation model where homeowners receive payment for excess electricity sent to the grid at a rate lower than the retail electricity rate they pay for grid consumption. This approach differs from net metering by separately tracking exported and imported power rather than offsetting them directly.
Rate Structure
Under net billing, exported solar electricity typically receives 50% to 75% of the retail electricity rate, ranging from $0.08 to $0.15 per kilowatt-hour depending on local utility rates. Homeowners pay standard retail rates of $0.12 to $0.20 per kilowatt-hour for grid electricity consumed. California’s net billing program establishes this as the standard for new solar installations as of 2022. Monthly bills show separate line items for exported and imported energy.
Financial Impact
Net billing reduces system payback periods compared to net metering but remains economically viable in high-cost electricity markets. Systems must be properly sized to maximize self-consumption while exporting surplus generation. Net billing encourages smaller installations and battery storage adoption to reduce reliance on low-rate energy exports. Residential systems generate 10-year savings of $12,000 to $20,000 under net billing.