SOLAR EXIT GUIDE
Net metering policies are shifting across the country, and reduced credits may fundamentally change your solar economics. Here's what it means for your savings — and your exit calculation.
Published April 13, 2026 · Not legal advice · Our methodology
Solar net metering changes in 2026 are reshaping the economics of rooftop solar for millions of homeowners across the United States. Net metering credit reductions — including California's NEM 3.0 impact on homeowners — are reducing the financial value of solar panels in many states, which has important implications if you're evaluating whether to stay in or exit your solar contract. Whether you're wondering how net metering buyback rates in 2026 compare to what you were promised, or whether net metering changes affect your lease, this guide breaks down what's changing, where, and what it means for you.
In This Guide
Net metering is a billing arrangement between you and your electric utility. When your solar panels produce more electricity than your home is using — typically during sunny midday hours — the excess electricity flows back to the utility grid. Under traditional net metering, you receive a credit at the full retail electricity rate for that excess power.
This 1-for-1 credit system made the economics of solar panels straightforward: every kilowatt-hour your system produced effectively offset a kilowatt-hour you would have purchased. It was the foundation of most solar savings projections.
Utilities and state regulators across the country are moving away from traditional full-retail net metering. The net metering credit reduction by state varies significantly, but the trend is clear. The core argument is that solar homeowners aren't paying their fair share of grid maintenance costs — they use the grid as a battery but contribute less in utility charges. Whether you agree with this reasoning or not, the policy shift is real and accelerating.
Why This Matters: If your solar savings projections assumed full retail net metering credits, but your state has since reduced those credits, the actual financial benefit of your solar system may be significantly lower than what was projected. This is particularly impactful for homeowners with solar leases or PPAs where the monthly payment stays the same regardless of how net metering changes.
California's transition to NEM 3.0 (officially called the "Net Billing Tariff") is the most significant net metering change in the country and serves as a bellwether for other states. The California Public Utilities Commission (CPUC) approved this restructuring in late 2022, with implementation beginning in April 2023.
| Factor | NEM 2.0 (Previous) | NEM 3.0 / Net Billing (Current) |
|---|---|---|
| Export credit | ~$0.28-0.35/kWh (full retail) | ~$0.05-0.08/kWh (varies by time) |
| Credit reduction | Baseline | ~75% reduction from NEM 2.0 |
| Time-of-use | Applied but credits remained high | Critical — midday credits are very low |
| Grandfathering | 20 years from interconnection | N/A (this is the new rate) |
| Battery incentive | Not significant | Battery storage strongly incentivized |
Under NEM 2.0, a California homeowner exporting 10 kWh of excess solar might receive $3.00 in credits. Under NEM 3.0, that same export might earn only $0.50-$0.80. Over a year, this difference can amount to hundreds or even thousands of dollars in reduced savings.
Grandfathering Note: If you installed solar under NEM 1.0 or NEM 2.0 in California, you're generally grandfathered into your original rate structure for 20 years from your interconnection date. This is valuable — and it's worth confirming your grandfathered status with your utility.
Net metering policies vary widely by state and are changing rapidly. The net metering buyback rate in 2026 depends heavily on where you live. Here's a general overview of the landscape as of early 2026:
Important: Net metering policies are evolving rapidly. The information above reflects our research as of early 2026 and may not reflect the most current status. Check with your specific utility for the most up-to-date net metering program details.
Wondering how net metering changes affect your solar contract? Get a free contract review to evaluate your options.
Net metering changes have a particularly significant impact on homeowners with solar leases and PPAs. If you're asking "does net metering change affect my lease?" — the short answer is yes, indirectly. Here's why:
Under a solar lease or PPA, your monthly payment to the solar company is determined by your contract — not by net metering policy. Whether net metering credits go up, down, or disappear entirely, you still owe the same amount to the solar company.
The "savings" from a solar lease or PPA come from the difference between what you would have paid the utility and what you're now paying the solar company (plus any remaining utility charges). When net metering credits are reduced:
Consider a homeowner with a solar PPA paying $0.18/kWh:
This is the question many homeowners are asking: if net metering changes have eroded your solar savings, does that give you any leverage to exit your contract? The answer is nuanced.
Important: Net metering changes alone are generally not sufficient grounds to cancel a solar contract. However, they may be one factor among several (misrepresentation, escalator clauses, system underperformance) that together build a case for exit. See our full guide on how to get out of a solar panel contract and consult an attorney to evaluate your specific situation.
Net metering changes can significantly impact the home sale process for properties with solar panels. Reduced credits may also affect your solar panel home value.
If your home is grandfathered under favorable net metering rates, this can actually be a positive selling point — the buyer would inherit net metering benefits that are no longer available to new solar installations. However, you'll need to verify whether the grandfathered status transfers with the home or if it's tied to the original account holder.
If your area has reduced net metering, potential buyers may:
Complete guide: Selling your home with solar panels →
What happens to solar panels when you sell your house →
If you signed a solar lease or PPA based on savings projections that assumed favorable net metering rates that have since been reduced, you may have options.
Go back to the original sales proposal and look for:
Calculate your actual savings since installation and compare to what was projected. If there's a significant discrepancy — even partially attributable to net metering changes — document it.
If you're considering pursuing a misrepresentation claim or negotiation based on failed savings projections:
Depending on your findings, you may be able to:
We do not advise homeowners to stop making payments or breach contractual obligations due to net metering changes or reduced savings. Continue making payments while exploring your options through proper legal and negotiation channels.
Ownership Disclosure: SolarPanelExit.com and TRU Solar Cancellation share common ownership. TRU Solar Cancellation offers a Solar Exit Document Package for a one-time $450 fee. TRU is not a law firm and does not provide legal advice. See our full ownership disclosure for details.
Net metering is a billing arrangement where the utility credits you at the full retail rate for excess solar electricity you send to the grid. Many states are reducing these credits — California's NEM 3.0 cuts credits by approximately 75%, and other states are following with similar reductions. This means the financial benefit of solar panels may be significantly lower than what was projected when you signed your contract.
If you have a solar lease or PPA, net metering changes can reduce the value of the electricity your system produces. While you still pay the same monthly amount to the solar company, the credits you receive from your utility for excess production may decrease. This can mean your total electricity costs are higher than projected, reducing or eliminating the savings advantage of your solar system. Results vary by individual situation.
Net metering policy changes alone generally don't provide legal grounds to cancel a solar contract. However, if your salesperson specifically promised savings based on net metering rates that have since changed — and did not disclose the possibility of rate changes — this may contribute to a misrepresentation claim. Consult an attorney to evaluate your specific situation. Find a solar panel lawyer →
As of early 2026, states with relatively favorable net metering policies include New Jersey, Massachusetts, New York, Maryland, and Connecticut, among others that still offer full or near-full retail rate credits. However, net metering policies are evolving rapidly. Always check your specific utility's current net metering program for the most accurate information.
California's NEM 3.0 (officially the Net Billing Tariff), which took effect in April 2023, dramatically reduced the credits solar homeowners receive for excess electricity — by approximately 75% compared to the previous NEM 2.0 rates. Homeowners who installed under NEM 1.0 or NEM 2.0 are generally grandfathered for 20 years. The reduced economics under NEM 3.0 have significantly changed the solar value equation for newer installations.
Net metering changes can affect home sales with solar in several ways. If your home has grandfathered net metering rates, that can be a selling point — but verify whether the grandfathered status transfers. If net metering rates have been reduced, potential buyers may view the solar system less favorably, which could affect the perceived value of the lease transfer or system purchase. Guide to selling a home with solar →
Get a free contract review to evaluate whether your solar contract still makes financial sense — and what your exit options look like.
This content is based on independent research and represents our editorial team's opinions. SolarPanelExit.com and TRU Solar Cancellation share common ownership. We may receive compensation when you contact companies through our site. This does not influence our editorial rankings. Results vary by individual situation. This is not legal advice.
Disclaimer: This article is for informational purposes only and is not legal advice. Net metering policies vary by state, utility, and installation date. Results vary by individual situation. We do not advise homeowners to stop making payments or breach contractual obligations. SolarPanelExit.com and TRU Solar Cancellation share common ownership. Consult a qualified attorney and your utility provider before taking action. See our Ownership Disclosure, Advertiser Disclosure, and Methodology.