Net Metering Changes by State: 2026 Update for Solar Owners

Net metering — the policy that credits solar homeowners for excess energy they send to the grid — is evolving rapidly across the country. The general trend is away from full retail-rate net metering toward lower compensation structures. If you're a solar homeowner, understanding these changes is critical to protecting your investment.

The National Trend

Utilities are increasingly pushing to replace traditional net metering (where you get full retail credit for exports) with net billing tariffs that value exports at lower wholesale or "avoided cost" rates. The good news: existing solar owners are generally grandfathered under their original terms — but protections vary by state and may have expiration dates.

State-by-State Breakdown

California — The Biggest Changes

California's net metering changes have been the most dramatic in the country:

• NEM 3.0 (Net Billing Tariff): Took effect April 15, 2023, reducing export compensation by approximately 75%
• Existing NEM 1.0/2.0 customers: Grandfathered for 20 years from their PTO (Permission to Operate) date
• AB 942 threat: If passed, could force NEM 1.0/2.0 customers who've been on their tariff 10+ years to transition to NEM 3.0 starting July 1, 2026
• Home sale impact: AB 942 would also prevent NEM 1.0/2.0 benefits from transferring to new homebuyers starting January 1, 2026

The CPUC is also conducting a three-year review of NEM 3.0 after April 2026, which could modify export rates or add fixed charges.

North Carolina — Grandfathering Expiring Soon

Duke Energy restructured its net metering program in October 2023:

• Pre-October 2023 customers: Grandfathered until 2027
• Bridge Rate option: Available until 2027, offers modified net metering for 15 years — a good fallback
• New customers: Choose between TOU rates or flat-rate billing (with additional fees)
• Dominion Energy: Net metering with a $200 fee for systems under 20 kW

Florida — Holding Strong

Florida remains one of the strongest states for net metering:

• Full retail rate net metering for systems up to 2 MW
• Credits roll over monthly with annual true-up varying by utility
• Legislative threats to net metering have been repeatedly defeated

New Jersey — Among the Best

• Full retail rate net metering with annual true-up
• Credits carry forward monthly
• SREC-II program: Additional $85 per MWh for 15 years
• NJBPU pricing review in March 2026 may affect future SREC-II rates

Colorado — The Gold Standard

Colorado has one of the strongest net metering policies nationally:

• Full kWh-for-kWh credit rollover (1:1 ratio)
• Credits roll over indefinitely — no annual expiration
• Applies to all utilities and co-ops (except small municipals)
• No immediate threats to this policy

Nevada — Moderate and Stable

• NV Energy Tier 4: 75% of retail rate for 20 years (~11.25¢/kWh)
• Monthly credit rollover; excess credits expire at year-end
• Overton Power District: Net metering for systems ≤10 kW

New York — Gradually Transitioning

• Full retail rate net metering for residential systems up to 25 kW
• Monthly credit rollover with annual cash-out at avoided cost rate
• Transitioning to VDER (Value of Distributed Energy Resources) framework for some customer classes

Arizona — Evolving Rates

• APS transitioned to a "Resource Comparison Proxy" rate for new customers (lower than retail)
• Existing net metering customers are generally grandfathered
• SRP and TEP have their own compensation structures

Texas — Utility by Utility

• No statewide net metering mandate
• Individual utilities offer varied buyback/credit programs
• Texas's deregulated market means rates vary significantly by provider
• Generally stable — no major policy changes

Massachusetts — Stable with Caps

• Net metering available with credits at or near retail rate
• Monthly credit rollover
• Some caps on total net metering capacity by utility territory

Summary Table

What Should You Do?

Regardless of your state, here are the four steps every solar homeowner should take:

1. Verify your grandfathering status and understand exactly how long your protection lasts
2. Consider battery storage to capture more value from self-consumption rather than relying on grid export credits
3. Monitor legislative changes in your state, especially if you're in California or North Carolina
4. Evaluate system upgrades carefully — significant capacity increases may trigger migration to less favorable rates

Net metering policies change frequently. Verify current rules with your utility provider. Last updated March 2026.