LADWP Net Metering in 2026, Explained (and Why It Changes Everything)

LA Energy Math · Updated August 5, 2026

If you own solar in Los Angeles — or you’re deciding whether to buy it — one policy matters more than every rate, rebate, and product decision combined: net metering. And here’s the thing almost nobody selling solar in LA will explain clearly: LADWP’s version is the most generous left in California, and it quietly decides what’s worth buying (panels) and what isn’t (batteries). This is how it actually works.

The mechanics, in plain English

When your panels produce more than your house is using — a sunny April afternoon, nobody home — the surplus flows out to the grid and your meter counts it. When you draw from the grid — that evening, overnight, all winter — the meter counts that too. At billing time, LADWP nets one against the other: exported kWh cancel imported kWh, and you’re billed for the difference.

The crucial detail is the exchange rate. Under LADWP’s program, an exported kWh cancels an imported kWh at roughly retail value — the same ~24–33¢ (after tax) you’d have paid for it. The grid is effectively a perfect battery: deposit a kWh at retail, withdraw a kWh at retail, no fee.

Three practical details worth knowing:

1. You’re netted over your bi-monthly billing cycle. A sunny week’s surplus offsets a cloudy week’s imports within the same bill without you doing anything.
2. Excess credits roll forward and don’t expire. If a spring cycle ends with more exports than imports, the credit carries to your next bill. LADWP doesn’t write you a check for surplus — it’s bill credit, not income — which has a big design consequence we’ll get to.
3. It works on the standard tiered rate. Unlike the investor-owned utilities, LADWP doesn’t force solar customers onto time-of-use pricing. Flat, simple, predictable.

Why this is a big deal: the rest of California lost this

In 2023, the CPUC moved SCE, PG&E, and SDG&E customers to NEM 3.0 (“net billing”). Under those rules, an exported kWh is credited at a fraction of retail — exports are valued at wholesale-ish “avoided cost” rates, and new solar customers must take time-of-use pricing. The economic effect: in IOU territory, solar alone got much weaker, and a battery became almost mandatory to capture your own production.

None of that applies to LADWP. LADWP is a municipal utility — the CPUC doesn’t govern it. As of August 2026 it still credits exports at approximately retail with no announced changes. If you’ve been reading solar advice written for “California,” most of it is describing NEM 3.0 rules that stop at LADWP’s border. This is the single most common reason online advice is wrong for Los Angeles.

Consequence #1: a battery has almost no job to do

Think about what a home battery is for, economically: store cheap or free energy, use it when energy is expensive. Under LADWP’s rules there’s no gap to exploit — the grid already stores your surplus at retail, the tiered rate has no cheap/expensive hours, and so a battery’s bill savings land around $0–100 per year against a ~$14,000 installed price. With the federal residential credit (§25D) expired since Dec 31, 2025, the arithmetic isn’t close: a battery in LA is a backup-power purchase, not an investment. The full math is in our Powerwall payback guide.

In NEM 3.0 territory, batteries make real financial sense. In LADWP territory, the net metering is your battery. Any pitch that ignores this distinction is a pitch written for the wrong utility.

Consequence #2: panels pay back fast — up to a hard ceiling

The same generosity flowing the other way: every kWh your panels produce is worth your full marginal rate — about 33¢ for a Tier 2 household after the city tax — whether you consume it live or export it and buy it back later. No battery needed to capture the value; production alone does it.

LA rooftops yield roughly 1,400 kWh per installed kW per year (that’s the measured multi-year output of a real 7.6 kW Sherman Oaks system, not a brochure figure). At a 33¢ marginal rate that’s ~$460 per kW per year; at 2026 cash prices of $2.50–3.50/W a system sized to your usage pays back in roughly 5–8 years against 25-year hardware.

But notice the ceiling: because surplus becomes rolling bill credit rather than cash, production beyond what you use in a year is nearly worthless to you. You can’t profit by overbuilding; you can only zero out your own bill. Which leads to the one sizing rule that matters:

Size to ~100% of your annual usage, and stop. Panels up to that line earn your full marginal rate. Panels past it earn approximately nothing. When an installer proposes 120% “to be safe,” they’re selling you hardware, not savings.

(Your annual usage is on your LADWP bills — six bi-monthly bills’ kWh added up, or run one bill through our analyzer for the sizing math.)

Will LADWP keep retail net metering?

Honest answer: no guarantee. LADWP sets its own rules and could change them; the state’s IOUs show which direction the industry pressure points. What can be said factually: LADWP has kept near-retail net metering through 2026, years after the IOUs abandoned it, with no announced plans to change — and municipal utilities answer to city politics, which in LA have so far favored rooftop solar. If a change ever comes, new-customer rules typically differ from existing-customer rules (that’s how the IOU transitions worked, with legacy customers grandfathered for years), which is an argument for sooner rather than later if you’re going to do it — but treat that as context, not a promise.

FAQ

Is LADWP on NEM 3.0? No. NEM 3.0 is a CPUC policy binding SCE, PG&E, and SDG&E. LADWP is municipally owned and still nets exports against imports at approximately retail rates.

Do my solar credits expire? No — excess credits roll forward on your account and don’t expire.

Will LADWP pay me cash for my surplus? No. Surplus becomes bill credit, not a check. That’s why oversizing a system past your annual usage wastes money.

Do I have to switch to time-of-use to go solar? No. LADWP’s default tiered rate (R-1A) works with net metering — and for most solar households it’s the better choice. See our tiered vs. TOU guide.

Does net metering cover my fixed charges? No — the fixed Power Access Charge (~$45 per bi-monthly bill) and the water/sewer portions of your LADWP bill are yours regardless of how much you export. Solar can zero your energy charges, not your bill.

I have an EV — does this change anything? It makes solar even better: EV charging is usually billed at your worst tier, so panels sized to cover it earn top-tier rates. The math is in our EV charging guide.

Verified August 2026: rate figures read off real LADWP R-1A bills; net-metering mechanics cross-checked against LADWP program descriptions and current policy trackers. Not affiliated with LADWP. Education, not financial advice.