Net Metering vs Net Billing: What’s Actually Different State to State Beyond California’s NEM 3.0

The Three-Way Split Most Homeowners Never Hear About

Every solar conversation that references net metering eventually runs into California’s NEM 3.0 shift, but California is one state inside a much wider, three-way national split. Per DSIRE’s May 2026 summary maps, 28 states plus Washington, D.C. and four US territories, Guam, Puerto Rico, the Northern Mariana Islands, and the US Virgin Islands, currently have utilities offering net metering, meaning full retail-rate credit for the power a solar system sends back to the grid. Sixteen states instead run on net billing or another distributed-generation compensation structure, a lower-value successor tariff of the kind California adopted under NEM 3.0. One state, Tennessee, based on the map’s own shading, offers no distributed-generation compensation at all.

Worth noting plainly: DSIRE’s own document is not perfectly internally consistent on the first count. Its map legend states “28 states plus D.C.” for net metering, while its own callout box on the same document states “27 states plus D.C., Guam, Puerto Rico, the Northern Mariana Islands, and the U.S. Virgin Islands.” That one-state gap sits inside DSIRE’s own published material, not a transcription error on this page’s part, and it is worth disclosing rather than silently picking whichever number sounds cleaner.

Some States Are a Mix, Not a Single Answer

Several states on DSIRE’s map are hatched or striped rather than solidly shaded, meaning the state itself runs a mix of net-metering and net-billing utilities depending on which utility territory a home falls in. A homeowner’s actual policy in one of those states depends on which utility serves their address, not on a single statewide answer, which makes “does my state have net metering” an incomplete question in a meaningful share of the country.

It Is Not Just Whether, It Is What Rate

DSIRE’s companion map, Distributed Generation Customer Credit Rates for Excess Generation, goes one level deeper than the yes-or-no net-metering question. It classifies every state by the actual rate excess generation is credited at: the full retail rate, true net metering; a time-of-use retail rate; a rate somewhere between retail and avoided cost; or avoided-cost wholesale rate only, the lowest tier a state can sit in. States including Arizona, Texas, Alabama, Georgia, and South Carolina carry an additional asterisk on this map, flagging additional fees layered onto small distributed-generation customers on top of whichever credit-rate tier they sit in.

Five States Where the Statewide Answer Does Not Hold

DSIRE’s own footnotes name specific carve-outs a single statewide label cannot capture. New York offers net metering for small customer-generators but uses a different compensation mechanism for larger ones. Vermont runs retail-rate net metering but applies negative credit adjustors to all production, quietly reducing the effective rate. Idaho has no statewide net metering policy at all; individual utilities have been required to offer it only through separate state commission dockets, with one utility instead running an approved alternative mechanism. Oregon’s statewide policy covers every investor-owned utility except Idaho Power, which mirrors its own Idaho policies instead. And Texas has no statewide net metering rule whatsoever; a bill signed in May 2025 lets the state’s Public Utility Commission approve an alternative compensation method, and any investor-owned utility that voluntarily offers compensation for qualifying facilities does so at the retail rate, by choice, not by mandate.

Why Texas Sits Outside the Rest of This Map

Texas is worth calling out on its own. In the ERCOT market specifically, distributed-generation compensation is “at the discretion of the retail electric provider,” meaning there is no state-mandated net metering or net billing requirement governing what a Texas solar homeowner gets credited at all, only whatever a specific retail electric provider chooses to offer. That is a different regulatory starting point than every state on either side of the net-metering or net-billing divide, and it is a distinct answer from “Texas has net billing” or “Texas has net metering.”

What This Means Beyond California

California’s NEM 3.0 shift gets most of the national attention, but it describes one state’s version of a pattern already in place in 15 other states. A homeowner outside California asking “do I still get full credit for my excess solar” needs the state-specific answer, net metering, net billing, a hybrid depending on utility, or in Texas’s case, whatever a specific retail provider decides, not a generic reference to what happened in California. The honest version of this conversation starts with which of DSIRE’s categories the homeowner’s actual state and utility fall into, not an assumption borrowed from wherever the last headline was about.

Sources

The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.

• DSIRE, net metering for investor-owned utilities map, May 2026
• DSIRE, distributed generation customer credit rates for excess generation map, May 2026

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