Clean Energy SF: San Francisco, fog then sun, est. 2026

Vol. 1 - No. 14 - Thursday, September 24, 2026 - Free to readers

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NEM 3.0: how the net billing tariff rewrote the payback on a San Francisco rooftop

The 2023 switch from net metering to net billing cut the credit a rooftop array earns for exported power to roughly a quarter of its old value. For a foggy San Francisco roof, that quietly turned a battery from optional into close to mandatory.

Filed October 23, 2026 By the Clean Energy SF editors Reading time: 6 minutes

I. What the net billing tariff actually changed

The old system, net energy metering, ran your meter backward: a kilowatt-hour you sent to the grid at noon offset a kilowatt-hour you pulled at night, dollar for dollar at the retail rate. Net billing breaks that one-to-one trade. Every exported kilowatt-hour is now credited at an avoided-cost value, a number the CPUC publishes for each hour of each month in a long table, and most daylight hours come out low.

Here is where San Francisco's weather does something specific. The avoided-cost values spike in late-summer evenings, when the grid is strained and the sun is gone, and they sit near the floor at midday, when every south-facing roof in the Sunset and Noe Valley is producing at once. Fog that burns off by late morning hands you a strong midday export exactly when that export is worth the least.

II. The honest math on a Noe Valley flat

For a solar-only system, the shift stretches the payback. Installers who once quoted something in the range of six or seven years for a San Francisco roof now tend to quote high single digits to low teens, depending on your rate plan, your roof, and how much power you draw during the expensive evening window. Those are rough figures, and any quote that sounds precise to the month is guessing.

Pair the array with a battery and the math changes direction. Instead of exporting cheap midday power, you store it and use it from roughly 4 to 9 p.m., when PG&E's time-of-use rates (prices that rise and fall by hour) are highest and the avoided-cost credit would have been small anyway. The battery costs real money up front, so whether it pays back depends on your evening usage and on whether the federal tax credit still applies when you sign.

III. Where CleanPowerSF and PG&E each fit

Most San Francisco households buy their electricity through CleanPowerSF, the city's community choice program run by the SFPUC (the San Francisco Public Utilities Commission, the city agency that also runs Hetch Hetchy Power). CleanPowerSF supplies the generation; PG&E still owns the wires, reads the meter, and sends the bill. Net billing applies across PG&E's territory, so it reaches your roof either way.

The wrinkle is that CleanPowerSF sets its own credit terms for the generation portion, and those can differ a little from PG&E's. If you are checking an installer's quote against your own numbers, pull both: PG&E's net billing tariff schedule and CleanPowerSF's current rates page. The export credit you actually earn is the sum of the two parts, not a single posted rate.

IV. Worth watching this month

1. The CPUC updates its avoided-cost calculator on a roughly annual cycle, which quietly resets export values, so this is routine but worth a look before you sign.

2. Any CPUC proceeding that revisits net billing export values or the residential glide path would matter more than a routine update, so watch the commission's docket pages.

3. The federal residential clean energy tax credit, which covered about 30 percent of a system's cost, was set to expire at the end of 2025 under 2025 federal law, so confirm current eligibility before you commit.

4. CleanPowerSF revises its posted rates from time to time, so check its rates page for the credit terms in effect this month.

5. PG&E's time-of-use peak window and rates move with its filings, so confirm the evening hours and prices that will govern your battery's payback.

Frequently asked questions

Do I still save money with rooftop solar under net billing?

Usually yes, but less than under the old rules and over a longer stretch of years. The savings now come mostly from using your own power in the evening rather than selling surplus at midday.

Do I have to buy a battery?

No rule requires one. Without a battery, though, the payback on a typical San Francisco roof stretches out, because your cheapest midday power earns the smallest credit.

Does San Francisco fog make rooftop solar a bad bet?

Not on its own. The city still gets usable sun, and the microclimate affects the timing of your production more than the yearly total.

I buy power through CleanPowerSF, not PG&E. Does net billing still apply?

Yes. Net billing applies throughout PG&E's service territory. CleanPowerSF sets its own generation credit terms, so your total export credit combines both parts.

References