1. What changed: NEM 2.0 vs NEM 3.0
For about two decades, California's big utilities credited exported solar at close to the full retail price. The grid worked like a free battery: export 20 kWh at noon, use 20 kWh at night to charge your EV, and pay almost nothing.
In April 2023, the California Public Utilities Commission replaced that system for new customers of PG&E, Southern California Edison and San Diego Gas & Electric with the Net Billing Tariff, usually called NEM 3.0. Exported solar is now valued using the utility's "avoided cost," which changes by hour and season. For most hours, that's only a few cents per kWh, often around 5 cents.
Customers who joined under the older rules keep them for 20 years from when their system was connected.
2. What it means for charging at night
Take a 2024 Tesla Model Y Long Range (29 kWh per 100 miles, EPA) driven 12,000 miles a year. It needs about 3,480 kWh a year. The home is on PG&E's EV2-A plan, where overnight power costs about 23 cents per kWh and the 4–9 PM peak about 45 cents (averaged over the year).
| How the car is charged | What the car's charging costs a year | Notes |
|---|---|---|
| NEM 2.0 (older customers), charging at night | About $0 | Daytime exports earn close to full retail credit |
| NEM 3.0, charging overnight off-peak | About $630 | About $800 of power, minus about $170 of export credit at 5¢ |
| NEM 3.0, charging during the 4–9 PM peak | About $1,390 | About $1,570 of power, minus about $170 of export credit |
| NEM 3.0, charging while the sun shines | About $0 | The car uses the solar directly, with nothing exported |
| NEM 3.0 with a home battery | About $0 for the car | The battery costs about $13,500 installed |
What the numbers mean
The biggest mistake is charging in the evening peak: it costs about twice as much as charging after midnight. Just setting the car to charge off-peak saves about $770 a year in this example, at no cost.
Charging while the sun shines is the best option if your car is home during the day, for example if you work from home or charge on weekends. A solar-aware charger makes sure the car uses only spare solar.
A battery brings the car's charging cost close to zero, but on its own it saves only about $630 a year against off-peak charging. At about $13,500 installed, that's around 20 years to pay back from the car alone. It pays back much faster if the battery also runs your home through the expensive 4–9 PM peak, and if you qualify for a rebate from California's SGIP program.
3. Sizing a battery for EV charging
Remember that your home keeps using power in the evening too: the fridge, lights, air conditioning and so on. Many homes use 8 to 15 kWh between sunset and morning. Add a 10 kWh daily commute and the total can reach 18 to 25 kWh, more than one Powerwall's 13.5 kWh.
Rather than buying two batteries, most owners let the battery cover the home's evening peak and set the car to charge after midnight at the off-peak rate, or charge it from solar on weekends. That gets most of the savings for a much lower cost.