SCE Net Metering

Table of Contents

• 1. What Is Net Energy Metering With SCE?
• 2. NEM 2.0 vs. the SCE Solar Billing Plan (NEM 3.0)
• 3. How the SCE Solar Billing Plan Works
• 4. The Southern California Edison Solar Application Process
• 5. NEM 2.0 vs. NEM 3.0 at a Glance (Table)
• 6. Export Credit Infographic
• 7. SCE and Solar: Is It Still Worth It in the USA?
• 8. Common Challenges With Southern California Edison Solar Projects
• 9. How PTOEdge Helps With SCE Interconnection and PTO
• 10. FAQs
• 11. Conclusion

Southern California Edison serves millions of customers across the USA’s most solar-active region. Because rates run high and sunshine is abundant, solar still makes financial sense for many homeowners. However, the billing structure behind southern California Edison net metering has shifted twice in less than a decade, so getting the details right matters more than ever.

What Is Net Energy Metering With SCE?

Net energy metering, or NEM, is the billing arrangement that credits solar customers for the extra electricity their system sends back to the grid. In other words, when your panels produce more power than your home uses, that surplus does not go to waste. Instead, it flows onto the grid, and SCE tracks it against your usage. As a result, your monthly bill reflects the difference between what you drew from the grid and what you sent back.

This concept sounds simple, yet the value of that credit has changed dramatically over time. Consequently, so cal Edison net metering today looks very different from the program that existed even five years ago.

NEM 2.0 vs. the SCE Solar Billing Plan (NEM 3.0)

Under the older NEM 2.0 tariff, SCE credited exported energy at close to the full retail rate. Therefore, a customer who exported a kilowatt-hour at noon earned nearly the same value as a kilowatt-hour purchased from the grid at night. That structure made solar payback periods relatively short and predictable.

Everything changed on April 15, 2023, when the California Public Utilities Commission’s Decision D.22-12-056 took effect for SCE. This new structure, officially called the Solar Billing Plan and widely known as NEM 3.0, credits exported power at an hourly “avoided cost” value instead of the retail rate. Because that value is typically 70 to 75 percent lower than the old NEM 2.0 credit, self-consumption and battery storage now matter far more than raw export volume.

If your system received Permission to Operate on or before April 14, 2023, the good news is that you were grandfathered into NEM 2.0 for a 20-year term. On the other hand, any system interconnected after that date falls under the Solar Billing Plan. You can review the official decision and program details directly from the state regulator here:
California Public Utilities Commission — Net Energy Metering and Net Billing.

How the SCE Solar Billing Plan Works

Under the current SCE solar billing plan, solar energy that you consume on-site offsets your bill at the full retail rate, which sits around 34 to 35 cents per kilowatt-hour for many residential customers. Meanwhile, any excess power exported to the grid earns credit based on the CPUC’s Avoided Cost Calculator, a tool that estimates the real-time value of that energy to the grid.

Because the avoided cost rate changes by hour, day, and season, exporting power at 1 p.m. in April is worth far less than exporting it at 7 p.m. in September, when the grid needs power most. As a result, homeowners who pair solar with a battery, and shift their exports toward the evening peak, tend to see stronger financial returns than those who export everything at midday.

In addition, all SCE customers, including those with solar, pay non-bypassable charges of roughly two to three cents per kWh. These charges fund public programs such as low-income assistance and energy efficiency, and they apply regardless of your net metering status.

The Southern California Edison Solar Application Process

Before your system can start earning credits, it has to clear SCE’s interconnection process. Below is what that process typically involves, from the initial SOL application through final activation.

Step 1: Submit Your SCE Solar Application

Your installer submits an interconnection request, sometimes called the SOL application, through SCE’s online portal. This application includes your system design, equipment specifications, and single-line diagram. Because errors here cause the most common rejections, accurate documentation matters from the very first step.

Step 2: SCE Meter Spot Check

Next, SCE reviews your meter location and, in many cases, schedules a meter spot check to confirm the physical setup matches the application. This step verifies that your existing meter can support bidirectional metering, or that a new meter will be installed correctly. If the meter spot does not meet clearance or access requirements, SCE will request corrections before moving forward.

Step 3: Letter of Credit for SCE (Larger Systems)

For larger commercial systems, or projects interconnecting under SCE’s Wholesale Distribution Access Tariff, SCE may require a letter of credit or another form of financial security before construction begins. This letter of credit protects SCE against the cost of unfinished interconnection work. Consequently, commercial developers should factor this requirement into their project timeline and financing plan early, rather than treating it as a late-stage surprise.

Step 4: Permission to Operate (PTO)

Once your local building department approves your permit and SCE confirms your system passes inspection, SCE issues Permission to Operate. Only after that point can your system legally export power and start earning net metering credits. Because PTO is the final gate before your solar investment starts paying off, a clean, accurate Permission to Operate submission is one of the highest-leverage steps in the entire project.

NEM 2.0 vs. NEM 3.0 at a Glance

Export Credit Infographic of SCE Net Metering

The chart below illustrates roughly how much value shifted away from midday solar exports once the Solar Billing Plan replaced NEM 2.0.

SCE and Solar: Is It Still Worth It in the USA?

Despite the lower export credits, southern California Edison solar projects still make sense for many homeowners. SCE’s residential electricity rate runs close to double the national average electricity price across the USA. Therefore, even a modest amount of self-consumed solar power avoids a meaningfully expensive retail rate, which keeps payback periods reasonable for well-sized systems.

Furthermore, the Inland Empire and much of SCE’s territory receive strong year-round sun, so production numbers stay high. Ultimately, the winning strategy under the Solar Billing Plan is different from the old approach: size your system for your own usage, add a battery, and shift your consumption toward evening hours rather than chasing maximum exports.

Common Challenges With Southern California Edison Solar Projects

Even a well-designed system can stall if the paperwork is not right. For example, an inaccurate single-line diagram or a mismatched meter spot address can push a project back several weeks. Similarly, missing documentation for a letter of credit on a commercial project can delay construction entirely.

Interestingly, installers who work across multiple utilities often notice similar friction points. Our recent breakdown of the PG&E Solar PTO process highlights many of the same review delays that show up in SCE territory, since both utilities answer to the same state regulator. Because of this overlap, many of the best practices for avoiding delays apply no matter which California utility you are working with.

How PTOEdge Helps With SCE Net Metering and PTO

PTOEdge prepares SCE-ready plan sets, handles the interconnection application, and manages the entire path to Permission to Operate so installers do not have to chase paperwork themselves. Because our team tracks SCE’s requirements closely, submissions clear review with fewer corrections.

Want to see how PTOEdge can speed up your next SCE project? Browse our full permitting insights library for more state-specific guides, or reach out directly for a project quote.

Frequently Asked Questions

Conclusion on SCE Net Metering

SCE net metering has changed significantly since 2023, and understanding the Solar Billing Plan is essential before you submit an application. From the SOL application through the meter spot check and, for larger projects, the letter of credit, every step affects how quickly your system reaches Permission to Operate. Because the paperwork determines your timeline as much as the hardware does, working with a team that knows SCE’s process closely can save weeks. If you are planning a solar project anywhere in the USA, PTOEdge can help you move from application to activation with fewer delays.