Thinking of installing solar panels at home? With new rules around net billing coming into effect in 2025, Sacramento and Northern California homeowners are facing important decisions about how to maximize savings. Utility companies like SMUD and PG&E are updating their compensation systems, making it more crucial than ever to understand what these changes mean for your home energy and electricity bills.
Understanding Net Billing vs. Net Metering
For years, homeowners benefited from net metering—a system where utilities credited solar customers at the full retail rate for energy sent back to the grid. Net billing, which is replacing traditional net metering in much of California under the NEM3 policy, does things differently.
How Net Billing Works
With net billing, the value for extra solar energy exported to the grid is often based on the utility’s avoided cost or real-time wholesale prices, not the retail electricity rate you pay. This means credits for excess solar production are usually lower than before, impacting how quickly you recoup your investment in solar panels.
Changes to Net Billing in Sacramento and NorCal (2025)
Starting in 2025, the net billing rules for homeowners in Sacramento (SMUD) and Northern California (PG&E and others) will reduce the value of energy exported to the grid even further. These updates are designed to better reflect the current value of solar to the electric grid and incentivize customers to use more of their own solar energy at home—especially by adding battery storage.
What’s Different in Sacramento vs. PG&E Territory?
- SMUD Net Billing Updates: SMUD is aligning its export rates to better match market conditions, meaning credits given are generally lower than the electricity rate you pay to buy power.
- PG&E and NEM3: PG&E adopted NEM3 (Net Energy Metering 3.0), which pegs export rates to hourly energy values. The bottom line: solar credits now drop significantly, especially in non-peak hours.
How Will Solar Savings Be Affected?
With lower credits for sending excess energy to the grid, the payback period on solar panel investments may lengthen—unless you adapt your system and habits. Here’s what Sacramento electricity customers and those in surrounding areas need to know:
Solar + Battery Storage: A Winning Combination
The new net billing environment makes solar batteries far more valuable. By storing daytime solar energy and using it during evening peak rates (when grid electricity is expensive), you can greatly increase your home energy savings. This “self-consumption” approach helps keep more money in your pocket, despite reduced export credits.
Example Scenario: Homeowner in Roseville
Imagine a Roseville homeowner installed solar panels and a battery in 2025. During sunny hours, the panels both power the home and charge the battery. After sunset, instead of drawing expensive electricity from the grid, the homeowner uses their stored solar power. The reduced value of exported power matters less because most of the solar generation is used at home.
Key Takeaways for Sacramento and NorCal Residents
- Solar system design matters more than ever: Consider including battery storage to maximize self-consumption and reduce reliance on low-value export credits.
- Utility rules differ: SMUD, PG&E, Roseville Electric, and other NorCal utilities each have unique net billing policies, rates, and timelines. Consult your utility or a local solar installer for details about your neighborhood.
- Timing can impact savings: Installing your solar panels before further rule changes could help you lock in better compensation terms.
What You Can Do Next
With electricity rates in Sacramento and Northern California continuing to climb, home solar remains a compelling way to take control of your energy bills. Staying informed about net billing changes in 2025 is the first step toward making a smart, future-proof investment.
- Talk to a reputable solar installer: Get a custom analysis for your home’s location, roof, and usage patterns.
- Compare tariff rates and battery options: See how different net billing rules and technologies impact your long-term savings potential.
- Ask about available incentives: Federal tax credits and some local rebates can still help offset upfront costs.
Conclusion: Secure Your Solar Savings—Start Now
The energy landscape is changing fast for Sacramento, Elk Grove, Roseville, and all of Northern California. Understanding 2025 net billing updates is crucial if you want to optimize your solar investment. Ready to see how battery-backed solar can slash your electricity bills even under the new rules? Contact us today for a free consultation and customized tariff comparison—let’s secure your home energy savings together!
