NEM 3.0 Solar: Is It Still Worth It in the Bay Area?

California's Public Utilities Commission issued Decision 22-12-056 in December 2022. The new NEM 3.0 tariff became effective for new solar applicants on April 15, 2023.

Here is the core change. Under NEM 2.0, you received roughly the full retail rate for electricity you sent back to the grid. That was around $0.25–$0.35/kWh for PG&E customers at the time. Under NEM 3.0, the export rate dropped to roughly $0.02–$0.05/kWh. That is about 75% less.

To be clear, power you use yourself — straight from your solar panels during the day — still saves you the full retail rate. PG&E's time-of-use rates run $0.30–$0.50/kWh during peak hours. So using your own power at $0.45/kWh, instead of exporting it at $0.03/kWh, is a 15x difference. That gap is the whole point of NEM 3.0: use more of your own power, send less to the grid.

Who is grandfathered under NEM 2.0?

Interconnection means hooking your solar up to the grid. If your system was interconnected under NEM 2.0 before the April 15, 2023 deadline, you keep NEM 2.0 rates for 20 years from that date. You may also qualify if you submitted a complete interconnection application to PG&E before the cutoff. That depends on when PG&E processed it.

New applicants — anyone applying for solar interconnection after April 15, 2023 — are under NEM 3.0. That covers most Bay Area homeowners starting solar today.

Let's work through a real example for a Bay Area household.

Assumptions

• 7 kW solar system.
• Bay Area location (Pleasanton, Livermore, or similar East Bay / Tri-Valley).
• PG&E service territory, E-TOU-C rate schedule.
• Annual electricity cost before solar: $2,400.
• System produces roughly 10,500 kWh per year.
• System cost: $25,000 (solar only, assuming roof is already in good shape).
• Federal solar tax credit: none (ended for systems placed in service after December 31, 2025).
• Net cost: $25,000.

Without a battery — export-heavy scenario

Say you are away during the day, so most of your solar exports to the grid. You receive $0.03/kWh for that exported power. Then you buy grid power in the evening at $0.45/kWh. Net annual savings fall to roughly $1,000–$1,500. Payback: 17–25 years.

With a battery — self-consumption optimized

A 13.5 kWh battery stores midday excess and discharges it during the evening peak. Your self-consumption rate jumps from perhaps 30% to 70–85%. Annual savings rise to $2,000–$2,800. Payback on the solar portion (before battery cost): 9–13 years.

Adding a 13.5 kWh battery costs roughly $10,000–$15,000 installed. There is no federal credit to offset it. Combined project cost: $35,000–$40,000. Combined payback with battery: 13–20 years for most Bay Area homes.

The NEM 2.0 comparison

Under NEM 2.0, the same 7 kW system would have saved roughly $2,000–$2,600 a year even with heavy export, because export rates matched retail rates. At today's $25,000 price with no credit, that is a 10–13 year payback, against 17–25 years now without a battery. That era is over for new installations. Solar plus battery under NEM 3.0 is a longer-term investment now: with the 30% federal credit gone, the payback runs longer, though rising electricity rates shorten it.

Panels mounted on whatever roof is there cause problems when that roof wears out. NuShake is a roofing contractor with a GAF Solar Certified Installer credential, so the roof under your solar is planned for it.

Roofing license, electrical license

Panel wiring, batteries and the utility hookup are electrical work that needs a C-46 (solar) or C-10 (electrical) license; NuShake's license, CSLB #1142280, is C-39 roofing. At your estimate we tell you who does the electrical side of your project.

No panel removal cost later

If you put solar on a roof with 8 years of life left, you will eventually pay $3,000–$6,000 to have panels removed, the roof replaced, and panels put back. Do both now and that cost disappears entirely. NuShake's free estimate tells you your roof's actual remaining life before we recommend any solar timeline.

Flashing set while the roof is open

Solar mounts need flashed penetrations. On a re-roof we set the solar-ready flashing while the roof is open, instead of cutting into a finished roof later.

Itemized cost records

The 30% federal residential solar credit is not available for systems placed in service after December 31, 2025, so combining the jobs no longer earns a larger credit. NuShake gives you an itemized cost record for the roof work. Your tax advisor decides whether anything else applies.

GAF Energy's Timberline Solar is the only integrated solar shingle system with a true manufacturer's roofing warranty. That is because GAF makes both the shingles and the solar cells. The system lies flat against the roof and looks like regular shingles from the street. There are no racks drilled into the roof, so there are no rack holes to leak.

Here is the catch: only GAF Solar Certified Installers can install Timberline Solar. GAF requires specific training and audited project documentation before granting certification.

NuShake holds GAF Solar Certified Installer status alongside our GAF Master Elite, GAF Gold Elite, CertainTeed Select ShingleMaster, and Owens Corning Preferred credentials.

If you want conventional panel-compatible roofing, NuShake handles that too — every option is covered. But if you are interested in integrated solar shingles and want a contractor authorized to install them, you have a short list. Brian is on it.

California's Title 24 energy code requires cool-roof-compliant products on most re-roofing projects. Cool roofs reflect more solar energy and reduce heat gain — they carry a CRRC (Cool Roof Rating Council) rating for solar reflectance and thermal emittance.

Solar panels that cover a large part of the roof meet the cool-roof requirement for the covered area. Covered roof does not gain heat the same way an exposed roof does. For the uncovered areas, NuShake uses Title 24-compliant shingles or membrane as standard. On a combined project, this usually makes Title 24 compliance simple — no special exemptions or calculations needed. For more on this, see our Title 24 attic insulation guide. A panel-covered roof also runs cooler when the attic beneath it breathes properly. Our attic ventilation guide explains why airflow protects both the roof and the panels above it.

Bay Area solar production varies significantly by microclimate. The Tri-Valley — Pleasanton, Livermore, Dublin — gets 250–270 sunny days per year and averages about 5.5 peak sun hours. Closer to the coast or in the fog belt (San Francisco, Daly City), that drops to 4.0–4.5 peak hours. More sun means more production, faster payback.

Utility territory matters too. Most of our Bay Area service area falls under PG&E (Pleasanton, Livermore, Stockton). Customers closer to Sacramento — particularly Sacramento proper and Elk Grove — may be in SMUD territory. SMUD runs its own net metering rules, which are currently more favorable than PG&E's NEM 3.0. So if your property is in SMUD territory, the payback timeline can be noticeably shorter. Brian confirms which utility serves your address at the start of every consultation.

PG&E's interconnection process (the steps to hook your solar up to the grid) has several stages, each on its own timeline. It runs through the building permit, the utility's Rule 21 application, the install, and the final city inspection. The last step is PG&E's Permission to Operate, or PTO — the green light to switch the system on. Each one is a separate milestone.

NuShake pulls the roofing permit and sets the solar-ready flashing. Panel wiring, batteries and the utility hookup are electrical work that needs a C-46 (solar) or C-10 (electrical) license; NuShake's license, CSLB #1142280, is C-39 roofing. At your estimate we tell you who does the electrical side of your project. The interconnection window after installation typically runs 4–8 weeks on PG&E's end — that is normal and outside anyone's control.

Related services in our territory: solar roofing hub, Pleasanton roofing, Tracy roofing, Discovery Bay roofing.