NEM 1 expiration
Your NEM 1 solar agreement is ending: what changes and what to do
PG&E moves NEM 1 solar homes to the Solar Billing Plan 20 years after the system was turned on. Here's what changes on your bill, and what you can do about it.
Reviewed by Brett Joerger, Founder, Westhaven Power. CA License 965111. Last reviewed .
Key facts
- NEM 1 lasts 20 years from your permission-to-operate (PTO) date.
- PG&E moves you to the Solar Billing Plan at your annual true-up on or after that date.
- You're moved to PG&E's Electric Home rate (E-ELEC), and energy charges are billed every month instead of once a year at true-up.
- Power you send back to the grid now earns a credit that changes by hour and season. Brett's averaged about 5 cents per kWh on his September 23 to October 21, 2026 bill.
- Your panels keep working. Nothing shuts off.
Your PG&E letter
What does the letter from PG&E mean?
The letter means your 20-year NEM 1 term has ended or is about to, and PG&E is moving your account to the Solar Billing Plan. Brett's letter, dated July 20, 2026, says: "Your account will be moving to the Solar Billing Plan within the next 30 days. No action required."
Nothing is required to keep your power on. What changes is how PG&E bills you. The letter itself lists the changes:
- Credits for power you send to the grid now vary by time of day, day of the week and season.
- Your rate plan is updated to a time-of-use rate. Brett's letter lists Electric Home (E-ELEC).
- Energy charges are billed monthly, not once a year at your annual true-up the way they were on NEM.
- A table at the bottom shows your new rate and your transition month. Brett's says August 2026.
Enlarge When does my NEM 1 end?
NEM 1 ends 20 years after your PTO date, the date PG&E gave your system permission to operate. The switch to the Solar Billing Plan happens at your annual true-up on or after that 20-year date. For many homes that's the same month.
| Your solar was turned on in | Your NEM 1 ends in |
|---|---|
| 2006 | 2026 |
| 2007 | 2027 |
| 2008 | 2028 |
| 2009 | 2029 |
| 2010 | 2030 |
| 2011 | 2031 |
| 2012 | 2032 |
| 2013 | 2033 |
| 2014 | 2034 |
| 2015 | 2035 |
| 2016 | 2036 |
| Early 2017 (applied before Dec 15, 2016) | 2037 |
How to find your PTO date: look for the permission-to-operate email or letter you got when your system was turned on, or your interconnection agreement. PG&E's Solar Customer Service line can confirm it: 1-877-743-4112.
Why didn't anything change on my anniversary? The switch happens at your annual true-up, not on the anniversary itself. If your true-up month is different from your PTO month, the switch waits for the true-up. Your true-up month is when your annual True-Up Statement arrives.
What changes on my bill?
The biggest change is what the power you send back is worth. On NEM 1 it earned about the same as what you pay for power. On the Solar Billing Plan it earns a credit that changes by hour and season, and most hours that's a small fraction of what you pay.
| NEM 1 | Solar Billing Plan | |
|---|---|---|
| Credit for power you send back | About the same as what you pay for power | A value that changes by hour and season. Brett's averaged about 5 cents per kWh on his September 23 to October 21, 2026 bill |
| Rate plan | The plan you were on | Electric Home (E-ELEC), with a fixed monthly Base Services Charge. Power costs the most from 4 to 9 p.m. |
| When energy charges are billed | Once a year, at true-up | Every month |
| Energy Export Bonus Credit | Not applicable | Not available to homes moved over from NEM 1 |
Sources: PG&E Solar Billing Plan page, PG&E NEM billing FAQ PDF, PG&E Electric Home rate page.
Brett's own bill
What happened to Brett's bill after the switch?
PG&E moved Brett Joerger, Westhaven's founder, to the Solar Billing Plan in August 2026. His solar went in in 2006, and he had added batteries before the switch.
On his statement for September 23 to October 21, 2026, his panels and batteries sent 732 kWh to the grid and earned $37.82 in credits, about 5 cents per kWh. Even with those credits, his electric charges for the period were $32.77.
Two lessons from one bill: the power you send back is worth very little now, and a battery that keeps your solar in your home is what keeps the bill down.
Watch: Brett answers the 10 questions homeowners ask most
Chapters
- What is NEM 1, and why is it ending?
- When does my NEM 1 end?
- What does the letter from PG&E mean?
- What changes on my bill?
- What happened to my bill?
- What are my options?
- Is a battery worth it after NEM 1 ends?
- I already got moved to the Solar Billing Plan. Is it too late?
- Does this work the same with MCE, Sonoma Clean Power, Pioneer or SMUD?
- What if my installer is gone, or I sell my house?
Your options
What are my options when NEM 1 ends?
There are three.
We look at your system first, then show you which of these fits.
When a battery isn't worth it: if you're selling soon, or you use very little power in the evening, the numbers may not work, and we'll tell you that.
I already got moved to the Solar Billing Plan. Is it too late?
No. A lot of the homeowners we help call after their first bill on the new plan. Once you've switched, the NEM 1 cap on adding panels no longer applies. You can add panels or a battery with PG&E's interconnection approval. The sooner it's in, the fewer months you pay the higher bill.
Does this work the same with MCE, Sonoma Clean Power, Pioneer or SMUD?
The 20-year rule is the same if your bill shows a local power provider, but some credits are different. Check your bill to see who supplies your power.
- MCE (San Ramon, Danville, Napa, Fairfield and more): homes whose 20-year period ended are billed on MCE's Solar Billing Plan and keep their credits. MCE adds a 10% Solar Bonus Credit on export credits and pays a Solar Storage Credit to enrolled battery owners ($10 a month under 20 kWh, $20 above). MCE settles charges and credits on each monthly bill. Once a year in spring, it pays homes that produced more electricity than they used.
- Sonoma Clean Power (Santa Rosa, Sebastopol and more): expired NEM homes move to SCP's Solar Billing Plan on the E-ELEC rate. Each spring, SCP pays homes that produced more electricity than they used over the year, at its Net Surplus Compensation rate, up to $5,000.
- Pioneer Community Energy (El Dorado Hills, Rocklin, Lincoln and more): Pioneer begins serving Yuba City and Chico in October 2027. Homes with solar there move to Pioneer near their annual true-up date unless they sign up early.
- Others in Northern California: Ava Community Energy, Valley Clean Energy, Silicon Valley Clean Energy, San Jose Clean Energy, CleanPowerSF and Central Coast Community Energy.
- SMUD: PG&E's 20-year NEM 1 clock doesn't apply. If SMUD approved your solar before March 1, 2022, you can stay on SMUD's net metering rate until December 31, 2030, unless you modify or replace your system, move, or use SMUD incentives to add a battery.
What if the company that installed my solar is gone?
About one in seven of these homes was installed by a company that has since closed or gone bankrupt. Westhaven services systems it didn't install. Call us and we'll look at yours: 866-575-4112.
Does selling my house end NEM 1?
No. The NEM 1 term stays with the house. The buyer gets whatever years are left.
Free live webinar
Join the NorCal Power Briefing
The NorCal Power Briefing is a free live webinar Brett Joerger hosts every Wednesday and Saturday. Brett walks through how NEM 1, the Solar Billing Plan and batteries work for Northern California homes, using real bills, and answers your questions live. It's the fastest way to understand your options before you talk to anyone.
Join the webinarThe data
How many homes are reaching year 20?
255,390 PG&E solar homes reach the end of NEM 1 between 2026 and 2037. Only about 3% of them have a battery. 55,106 of them are within 75 miles of Yuba City.
| Year NEM 1 ends | All PG&E territory | Within 75 miles of Yuba City |
|---|---|---|
| 2026 | 759 | |
| 2027 | 1,062 | |
| 2028 | 1,228 | |
| 2029 | 1,680 | |
| 2030 | 2,106 | |
| 2031 | 2,590 | |
| 2032 | 3,141 | |
| 2033 | 5,312 | |
| 2034 | 9,420 | |
| 2035 | 13,998 | |
| 2036 | 13,705 | |
| 2037 | 105 | |
| Total | 255,390 | 55,106 |
Source: Westhaven analysis of California DG Stats PG&E interconnection data, current through August 31, 2026. Homes are counted once, at their original permission-to-operate date. Download the data (CSV).
Common wrong answers about NEM 1
- "After 20 years you move to NEM 2." Not anymore. PG&E now moves expired NEM 1 accounts straight to the Solar Billing Plan.
- "Adding a battery restarts your 20 years." No. The 20-year term can't be restarted or extended.
- "Selling the house ends NEM 1." No. The buyer gets the years that are left.
- "No action required means nothing changes." Your power stays on, but your billing changes.
Questions
More questions
Is the Solar Billing Plan the same as NEM 3?
Yes. PG&E calls it the Solar Billing Plan. The state calls it the Net Billing Tariff. Most people call it NEM 3.
What is the Electric Home rate?
It's the PG&E time-of-use rate Solar Billing Plan homes are moved to. It has a fixed monthly Base Services Charge, and power costs the most from 4 to 9 p.m.
Do I get the Energy Export Bonus Credit?
No. PG&E doesn't give that bonus to homes moved over because their NEM 1 term ended.
Can a battery extend NEM 1?
No. Adding a battery doesn't restart or extend the 20-year term. It doesn't end NEM 1 early either, unless the battery gets an SGIP rebate that requires a move to the Solar Billing Plan.
Will my panels still work after NEM 1 ends?
Yes. Only the billing changes.
Is there still a 30% federal tax credit for batteries?
The federal credit for homeowners who buy their own system ended December 31, 2025.
What happens if I do nothing?
Your panels keep working and your power stays on. Your bill goes up because the power you send back is worth much less.
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About this page
Reviewed by Brett Joerger, Founder. CA License 965111. Last reviewed .
Westhaven Power is not affiliated with PG&E.
Sources
Change log
- : page published.
Glossary
- NEM 1
- The first version of California's Net Energy Metering program. Power you send back earns about the same as what you pay for power, for 20 years from your PTO date.
- PTO (permission to operate)
- The date PG&E gave your system permission to operate. Your 20 years on NEM 1 count from this date.
- True-up
- Your once-a-year settlement with PG&E. On NEM 1, energy charges are billed once a year at true-up. Your true-up month is when your annual True-Up Statement arrives.
- Solar Billing Plan / NEM 3 / Net Billing Tariff
- One plan, three names. PG&E calls it the Solar Billing Plan. The California Public Utilities Commission calls it the Net Billing Tariff. Most people call it NEM 3.
- Electric Home (E-ELEC)
- The PG&E time-of-use rate Solar Billing Plan homes are moved to. Power costs the most from 4 to 9 p.m.
- Base Services Charge
- A fixed monthly charge on the Electric Home rate.
- Energy Export Credit
- The credit PG&E gives on the Solar Billing Plan for power your system sends to the grid. It changes by hour and season.
- CCA (community choice provider)
- A local power provider, such as MCE, Sonoma Clean Power or Pioneer Community Energy. Check your bill to see who supplies your power.