Updated October 14, 2026
On June 10, 2026, the California Supreme Court declined to rehear a challenge to NEM 3.0, closing the door on any judicial reversal of the state’s current rooftop solar billing rules. If you’re a Southern California Edison (SCE) customer weighing solar, here’s what the ruling actually changes — and why the math still works if you plan around it.
What did the California Supreme Court decide about NEM 3.0?
The court declined, without comment, to review a March 2026 appellate ruling that had already upheld the California Public Utilities Commission’s Net Billing Tariff — the formal name for what the industry calls NEM 3.0. A coalition of environmental and consumer groups, including the Environmental Working Group, the Center for Biological Diversity, and the Protect Our Communities Foundation, had asked the court to reconsider. With that petition rejected, the appellate decision stands as final. Any future change to NEM 3.0 now has to come from the CPUC itself or the state legislature — not the courts.
Does this ruling affect LADWP customers in Los Angeles?
No. NEM 3.0 only applies to customers of California’s investor-owned utilities — SCE, PG&E, and SDG&E — because it was created through a CPUC proceeding. The Los Angeles Department of Water and Power (LADWP) is a municipal utility the CPUC doesn’t regulate, and it continues to offer its own net metering program, which credits exported solar at close to the full retail rate. If your property is served by LADWP rather than SCE, this ruling has no direct effect on your solar economics.
What does NEM 3.0 mean for solar economics if you’re an SCE customer?
Under the Net Billing Tariff, SCE no longer credits exported solar at the retail rate. Instead, exports are paid at the Avoided Cost Calculator rate, which as of October 2026 runs roughly $0.04 to $0.08 per kWh during summer peak hours (4–9 p.m.) and closer to $0.02 to $0.04 per kWh off-peak — about 75-80% lower than the old NEM 2.0 credit. That shift changes the design math: a system sized purely to offset annual usage sends a lot of its value out as low-value exports. The homeowners getting the best payback under NEM 3.0 are pairing solar with battery storage, so the system stores midday production and uses it to avoid SCE’s expensive 4–9 p.m. peak rate instead of selling it back cheaply.
Is solar still worth it for SCE customers without the federal tax credit?
The federal residential credit under Section 25D (the 30% credit homeowners who buy a system outright could claim) expired December 31, 2025, under the One Big Beautiful Bill Act. Owned systems installed from 2026 onward no longer qualify for it. The main path left to a 30%-equivalent discount is third-party ownership — a solar lease or power purchase agreement — where the installer or financier claims the commercial 48E credit and passes savings through in the contract price; that provision runs through the end of 2027. For SCE customers specifically, pairing a smaller, battery-backed system with a financing structure that still captures a 48E discount is now the more common way to make the numbers work. This is general information, not tax advice. Consult a licensed tax professional about your specific situation.
What should SCE homeowners do now that NEM 3.0 is permanent?
With litigation over, it’s worth stress-testing a system design that accounts for today’s export rates instead of a quote based on outdated assumptions. The right size, battery capacity, and financing structure depend heavily on your SCE rate plan and your address’s load profile — current Los Angeles solar costs, battery backup options, and remaining California incentives all factor in differently than they did under NEM 2.0.
PV Sky USA installs residential solar throughout the SCE and LADWP territories and can model your specific address under current NEM 3.0 export rates before you commit to a system size. Call (818) 378-9204 or request a free, address-specific savings estimate to see where you actually land.