You went solar. You did something great for your home, your family, and the environment. So why does your PG&E bill still feel… confusing?
You’re not alone. One of the most common things we hear from solar homeowners on the Monterey Peninsula is some version of this: “I thought solar was supposed to lower my bill — so why am I still paying so much?”
The answer almost always comes back to one thing: understanding how NEM 3 actually works. Once it clicks, you’ll be able to take real control of your energy costs. Let’s break it all down — in plain English.
First, What Is NEM 3 (Also Called Net Billing Tariff or Solar Billing Tariff)?
NEM 3, officially called the Net Billing Tariff (NBT), is PG&E’s current billing program for residential solar customers. It replaced the old NEM 2 program in April 2023, and if you installed solar on or after that date, this is the program you’re on.
Here’s the simplest way to think about it:
Your solar panels produce energy. When you use that energy at home, you save money. When you send it back to the grid, PG&E pays you a credit — but that credit is calculated differently than it used to be.
Under the old NEM 2 program, you were credited close to the full retail rate for every kilowatt-hour (kWh) you exported. Under NEM 3, those export credits are based on something called the Avoided Cost Calculator (ACC) — a rate that’s typically much lower than what you pay to buy electricity from PG&E.
That’s the big shift. And it’s the root of most of the confusion.
Why Are My Export Credits Lower Than Expected?
Under NEM 2, if you sent 1 kWh back to the grid during the day, you might receive a credit worth $0.30 or more — essentially the same price you’d pay to buy that electricity.
Under NEM 3, that same 1 kWh exported might earn you somewhere in the range of $0.05 to $0.10, depending on the time of day and season. The rate fluctuates, but the key point is: exporting energy to the grid is much less valuable than it used to be.
This is why simply “making a lot of solar” during the day doesn’t automatically mean a low bill. If your panels are cranking out power while you’re at work and nobody’s home to use it, much of that energy is being exported — and you’re only getting a fraction of its retail value back.
The bottom line: In NEM 3, using your solar energy is far more valuable than exporting it.
So Why Is My Bill Still High?
Great question — and here are the most common reasons:
- You’re exporting during the day and buying back at night. This is the NEM 3 catch. Panels produce during daylight hours, but households tend to use the most energy in the evenings (think: cooking dinner, running the dishwasher, watching TV, charging devices). If you’re sending cheap credits to the grid at noon and buying expensive electricity back at 7 PM, your bill will feel higher than expected.
- Time-of-Use (TOU) rates are working against you. PG&E charges more for electricity during “peak hours,” which are typically 4 PM to 9 PM on weekdays. That’s exactly when your panels are slowing down and your household energy demand is climbing. Buying electricity during those hours costs significantly more per kWh.
- Fixed charges. PG&E has a mandatory fixed charge that all customers — including solar customers — pay each month regardless of how much electricity you use or produce. This charge doesn’t go away with solar.
- Your system size may not fully offset your usage. If your household energy consumption has increased since your system was designed (new EV, added square footage, more people at home), your panels may simply not be producing enough to keep up.
The Good News: You Have More Control Than You Think
Here’s where it gets empowering. NEM 3 rewards smart energy use, not just solar production. With a few habit shifts — and ideally a battery — you can dramatically improve your savings.
Use Energy When the Sun Is Shining
The simplest and most impactful strategy: shift your energy-heavy tasks to daytime hours. Instead of running the dishwasher after dinner, run it at noon. Do laundry on a sunny afternoon. Pre-cool your home in the early afternoon before peak rates kick in.
Every kWh you use directly from your panels — rather than from the grid — is a kWh you don’t have to buy back at retail rates. That’s your highest-value solar dollar.
Avoid Peak Hours (4 PM – 9 PM) When Possible
On PG&E’s Time-of-Use rates, electricity during peak hours costs significantly more. If you can delay high-consumption activities until after 9 PM (or better yet, do them before 4 PM), you’ll see meaningful savings on your bill.
Battery Storage Is a Game-Changer for NEM 3
If there’s one thing that changes the math completely under NEM 3, it’s a home battery like the Tesla Powerwall or Enphase IQ Battery. Here’s why:
Instead of exporting excess solar energy to the grid for a low credit, a battery stores that energy at home. Then, when the sun goes down and peak rates kick in, you pull from your battery instead of the grid — at zero cost.
In essence, a battery lets you become your own utility during peak hours. The savings stack up fast, especially in PG&E territory where peak rates can be some of the highest in the nation.
Smart EV Charging
If you drive an electric vehicle, charge it during solar production hours (typically 9 AM – 3 PM) rather than overnight. This is one of the highest-impact changes you can make, since EVs consume a significant amount of energy per charge. Many EV chargers and car apps allow you to schedule charging windows — take advantage of it.
The Bigger Picture: Solar Still Makes Sense
We want to be clear: solar is still one of the smartest energy investments a Monterey-area homeowner can make. NEM 3 changed the rules, but it didn’t change the fundamental value of generating your own clean electricity. It simply shifted how you capture that value — from exporting to the grid, to using your solar energy directly at home.
The homeowners who thrive under NEM 3 are the ones who understand the program and make intentional choices about when they use energy. With the right knowledge and habits — and the right setup — significant savings are absolutely within reach.
Still Have Questions About Your Bill?
Every home is different. Your usage patterns, system size, rate plan, and whether you have a battery all play a role in how your bill is calculated. If something doesn’t look right — or you just want a second set of eyes on your PG&E statement — reach out to us. We’re happy to walk through it with you and make sure you’re getting everything you should be out of your solar investment.
This blog post is intended for educational purposes. PG&E rates and tariff details are subject to change. Contact your solar provider or PG&E directly for the most current rate information.
