Net metering — the mechanism by which solar owners receive credit for surplus electricity exported to the grid — remains the single most important policy variable affecting residential solar economics in 2026. As tracked by the DSIRE database (dsireusa.org) and SEIA's state policy tracker, the landscape is increasingly fragmented: some states have preserved retail-rate compensation, others have shifted to avoided-cost or time-varying rates, and a few have no statewide policy at all. Below is a detailed look at the policies in five key states, followed by a comparative summary.
California — NEM 3.0 (Net Billing Tariff)
California's NEM 3.0, formally the Net Billing Tariff, took effect on April 15, 2023, and has now fully reshaped the state's residential solar market. Under NEM 3.0, export compensation is decoupled from retail electricity rates and instead tied to an Avoided Cost Calculator (ACC) that varies hourly. As of early 2026, average export compensation hovers around $0.08/kWh — a dramatic reduction from the retail rate of approximately $0.32/kWh that prevailed under NEM 2.0. The practical consequence: a standalone solar system's simple payback period has extended from 5–6 years under NEM 2.0 to 8–9 years under NEM 3.0. However, pairing solar with battery storage changes the math materially. By storing daytime generation and discharging during peak evening hours (when ACC rates are highest), a solar-plus-storage system can achieve payback in roughly 6–7 years — close to the old standalone-solar economics. This dynamic, combined with California's Self-Generation Incentive Program (SGIP) battery rebates, has driven the state's attachment rate (the share of new solar installations that include a battery) above 60% in 2026, per California PUC data.
New York — Maintained Net Metering with Capacity Limits
New York State has largely preserved traditional net metering, with export compensation at or near the full retail electricity rate for most residential systems. However, the Public Service Commission has introduced graduated capacity limits: residential systems up to 25 kW receive full retail-rate credit, while larger residential systems face a slight discount. The state's Value of Distributed Energy Resources (VDER) tariff, originally intended to replace net metering for larger systems, has seen limited adoption among residential customers. As of 2026, the vast majority of New York's residential solar owners remain on traditional net metering, making the state one of the most favorable jurisdictions in the country for solar economics. The NY-Sun program further sweetens the deal with upfront incentives that vary by region and income level.
Florida — Net Metering Preserved with Minimum Bill
Florida's net metering policy landscape shifted in 2024 with the passage of HB 741. The legislation preserved net metering as a concept but empowered investor-owned utilities (including FPL, Duke Energy Florida, and TECO) to impose a minimum monthly bill on solar customers, typically ranging from $30 to $35 per month. This minimum bill applies regardless of how much energy the customer exports, effectively reducing the net savings from solar for lower-consumption households. The export rate remains at the retail rate, but the minimum bill acts as a floor on the customer's monthly obligation to the utility. Publicly owned utilities (municipal and cooperative) are exempt from the minimum bill provision, creating a patchwork within the state. Despite this headwind, Florida's combination of abundant sunshine, relatively low installed costs ($2.50–2.90/W), and retained retail-rate net metering keeps the state among the top five in annual residential solar installations.
Texas — No Statewide Policy, Retail Provider Driven
Texas stands apart as the only major solar state with no statewide net metering mandate. In the competitive ERCOT market, each Retail Electric Provider (REP) sets its own solar buyback plan — or none at all. As of 2026, roughly 40 REPs offer some form of solar buyback, but the terms vary enormously. Some plans offer full retail-rate credit up to the customer's monthly consumption; others offer a wholesale-rate credit (typically $0.03–0.05/kWh); and a growing number of plans impose monthly caps on exported kWh or restrict credit to a dollar amount. The absence of a uniform policy means Texas solar buyers must invest time in plan comparison — a task made easier by tools like the Public Utility Commission of Texas's Power to Choose website. On the positive side, Texas's low installed cost ($2.40–2.80/W) and absence of state income tax partially offset the weaker export compensation. For homeowners who can consume a high share of their generation on-site (i.e., self-consumption), the net metering variability matters less.
Comparative Summary
| State | Policy Type | Export Compensation | Standalone Solar Payback | Key Constraint |
|---|---|---|---|---|
| California | NEM 3.0 (Net Billing) | ~$0.08/kWh (ACC-based) | 8–9 years | Battery strongly recommended |
| New York | Traditional Net Metering | Near retail (~$0.20–0.25/kWh) | 5–7 years | 25 kW capacity tier limit |
| Florida | Net Metering + Minimum Bill | Retail rate | 6–8 years | ~$30–35/month minimum bill |
| Texas | No statewide mandate | Varies by REP ($0.03–retail) | 6–10 years (plan-dependent) | REP plan selection critical |
The net metering landscape continues to evolve. Utilities across multiple states are petitioning public utility commissions to reduce export compensation rates, arguing that solar customers shift grid costs onto non-solar ratepayers. Solar advocates counter that distributed generation provides grid benefits — reduced transmission losses, peak shaving, and deferred infrastructure investment — that are not fully captured in avoided-cost calculations. Homeowners considering solar in 2026 should check their state's current policy on DSIRE (dsireusa.org) and consult SEIA's state policy tracker before finalizing an installation contract. Policy risk — the possibility that net metering terms could worsen during the system's 25+ year lifetime — should be factored into every investment decision.