Is Solar Worth It Without Full Net Metering?

Export compensation has been falling in many jurisdictions, and the common conclusion — "solar doesn't make sense anymore" — is too broad. What's true is that solar designed for full net metering doesn't make sense under net billing. A differently designed system often still does.

Export compensation models

Without full net metering, the economics shift from producing to self-consuming. That changes the design: a smaller array sized closer to daytime load, west-facing panels to match afternoon use, load shifting into daylight hours, and a battery becomes far easier to justify because storing a kWh beats exporting it for pennies.

What actually changes

Under full net metering, an exported kilowatt-hour and a self-consumed one are worth roughly the same, so timing barely matters and you size to annual usage.

Under net billing, exports earn a separate, lower rate. Which means:

Energy you use directly is worth your full retail rate. Energy you export is worth much less.

Everything below follows from that one sentence.

Design change 1: size smaller

Under full netting, the optimal array covers roughly your annual usage.

Under net billing, capacity that produces surplus you can't use is earning the low export rate rather than the retail rate — so the marginal panel earns much less than the first one.

The economically optimal size is roughly the capacity whose output you can consume directly most of the time, not the capacity that zeroes your annual bill.

This is genuinely counterintuitive: a smaller system can have a better return than a larger one, even though it saves less in absolute terms.

Interval usage data from your utility — hourly consumption — makes this far easier to estimate. Ask whether they provide it. See solar system sizing mistakes.

Design change 2: orientation for timing, not totals

South-facing maximizes total production. But under net billing you don't want maximum production — you want maximum self-consumed production.

West-facing shifts output into the late afternoon and evening, when people are home, cooking, running air conditioning and charging cars. More of that production gets used directly rather than exported cheaply.

So west can beat south even though it produces fewer total kilowatt-hours. See solar panel orientation and tilt.

An east-west split also flattens the curve, spreading production across more of the day rather than concentrating it at midday when nobody's home.

Design change 3: shift load into daylight

The cheapest improvement available, requiring no equipment at all.

Every kilowatt-hour moved from an evening import to a midday self-consumption is worth the full retail rate, not the export rate.

Practical shifts:

• EV charging during the day where your schedule allows — see off-peak EV charging for the general scheduling case
• Water heater scheduling — a tank is a thermal battery, and heat pump water heaters schedule easily. See heat pump water heater electrical requirements.
• Dishwasher and laundry on timers
• Pool pumps during production hours
• Pre-cooling the house in the afternoon so the AC runs less in the evening

Together these can meaningfully raise self-consumption share at zero capital cost, which directly improves payback.

Design change 4: batteries get interesting

Under full net metering, a battery competes with the grid acting as free storage — hard to justify economically.

Under net billing, a battery does something valuable: it converts a cheap export into an avoided retail purchase.

The value per kilowatt-hour cycled is roughly the spread between your retail rate and your export rate. Where that spread is wide, the arbitrage is real.

Whether it pays depends on that spread, the battery's cost, and how many cycles it delivers over its life. Model it rather than assuming — see solar battery payback and what size home battery do I need.

Batteries also provide backup power, which has value independent of the arbitrage. See do you need a home battery.

Time-of-use rates change the picture again

If you're on a time-of-use rate, the analysis sharpens.

Both the retail rate you avoid and the export credit you receive may vary by time of day. Where evening rates are high, self-consumed evening energy — from a west-facing array or a battery — is worth the most of anything in the system.

That combination, TOU plus net billing, is where west-facing arrays and batteries make the most sense. See time-of-use rates and solar.

When solar genuinely doesn't work

Being honest about this is more useful than encouragement.

The numbers may not work when:

• Electricity rates are low — there's little to save. See electricity rates by state.
• Export credit is minimal and your daytime consumption is small — you can't self-consume and can't sell
• The roof is heavily shaded or poorly oriented — see how shading affects solar panels
• Installation costs are high for your site — see what drives solar installation cost
• You'll move before payback, and resale value won't bridge the gap — see solar and home resale value
• The roof needs replacing and you're not ready to do it

Any combination of those can make solar a poor investment for a specific property. Finding that out from an honest model is a good outcome, not a failure.

Things that improve the case

Electrification raises daytime and total consumption. A heat pump, an EV and an induction range all increase the load solar can offset — and some of that load is schedulable into daylight. If electrification is in your plans, model with those loads included. See the home electrification roadmap.

Working from home raises daytime consumption directly.

High and rising retail rates improve the value of every self-consumed kilowatt-hour.

A wide retail-to-export spread strengthens the battery case.

Is solar worth it without net metering?

1. Get your utility's current tariff — export rate, true-up, any solar charges
2. Get interval usage data if available, to understand your consumption shape
3. Model two or three system sizes, not just the one proposed
4. Model with and without a battery, using the retail-to-export spread
5. Include future electrification loads if they're real
6. Check the honest payback including derate, degradation and inverter replacement

See how solar payback works and run the solar panel payback calculator.

The bottom line

Losing full net metering doesn't kill solar — it changes the design. Size for what you can consume directly rather than for annual offset, favour west or split orientations that land production when you're home, shift flexible loads into daylight for free, and evaluate a battery on the retail-to-export spread. Then be willing to conclude the numbers don't work for your specific roof and rates, because sometimes they don't.

Model your case with the solar panel payback calculator, estimate production with the solar output calculator, or read net metering explained.