Across the U.S., utility solar compensation changes are quietly reshaping how much homeowners are paid for the energy their solar systems send to the grid. Many homeowners still expect the same savings they were promised years ago — but the rules have changed, often without clear explanation from utilities or installers.
The result? Confusion, frustration, and smaller-than-expected savings.
How Solar Used to Be Paid
Full Retail Net Metering (Legacy Systems)
Under traditional net metering, excess solar energy sent to the grid was credited at the same retail rate homeowners paid for electricity.
- The meter effectively ran backward
- Credits offset usage dollar-for-dollar
- Annual true-ups often resulted in minimal electric bills
This model fueled rapid solar adoption — and is now being phased out.
How Solar Is Paid Today - Utility Solar Compensation Changes
Reduced Export Credits
Many utilities now pay a discounted rate for exported solar energy.
- Often 30–70% lower than retail rates
- Credit values may change yearly
- Long-term savings become harder to predict
Time-of-Use (TOU) Export Rates
Export value depends on when energy is sent to the grid.
- Midday exports are often worth the least
- Evening power is worth more
- Solar production no longer aligns with peak demand
Without storage, much of your solar energy earns minimal credit.
Avoided-Cost Compensation
Under avoided-cost models, utilities pay only what it would cost them to generate power.
- Rates are often far below retail pricing
- Compensation fluctuates year to year
- Solar exports may deliver limited value
If you're being charged what is called "Time of Use" or TOU Rates, even if your utility company is reimbursing you at a retail rate when your solar system sends energy to the grid, you are paying peak rates or possible super-peak rates at night when your solar system isn't producing. If you are being reimbursed at less than retail rates, you have an even larger gap. The solution here is to store energy produced during the day in a battery and use that "free" energy at night when rates for importing electricity are higher.
Battery-Driven Self-Consumption
As export compensation declines, utilities are encouraging homeowners to:
- Use more of their own solar power
- Store energy for evening use
- Reduce dependence on the grid
Solar is shifting from a “sell power back” model to a self-consumption strategy.
Real-World Policy Examples
California – NEM 3.0
Pacific Gas & Electric
Southern California Edison
San Diego Gas & Electric
California dramatically changed its solar compensation structure.
- Export rates dropped by up to 75%
- Midday solar credits are minimal
- Batteries are now essential for reasonable ROI
Solar still works — but only with proper system design.
North Carolina – Duke Energy
Duke Energy has moved away from traditional retail net metering.
- Lower compensation for excess generation
- New rate structures reduce export value
- Savings now depend on usage patterns, not panel count
Other States Following Similar Paths
Utilities nationwide are adopting similar approaches:
- Arizona – Reduced export rates and TOU structures
- Florida – Proposed policy changes and fixed charges
- Texas – No statewide net metering; utility-specific buyback rates
The direction is consistent: exported solar is worth less than before.
What This Means for Homeowners
The biggest issue isn’t that policies changed — it’s that most homeowners were never told.
- Old savings assumptions may no longer apply
- Panels alone may not deliver expected ROI
- Batteries are becoming financial tools, not luxuries
Solar still makes sense — but only when designed for today’s rules.
Schedule a Call with Us
If you own a solar system, now is the time to:
- Have your system reviewed under current utility policies
- Understand whether a battery improves your savings
- Learn how your specific utility values exported energy
- And if your installer has gone out of business, learn how to get lomg term monitoring and support for your system.
Getting informed today helps prevent surprises tomorrow.