If your solar went in before April 2023, you’re probably on SDG&E’s legacy NEM 2.0 plan, and it’s worth protecting. Here’s what you can add, what could cost you the plan, and what happens when the home sells or the 20 years run out.
Key takeaways
- NEM 2.0 lasts 20 years from the date your system was interconnected. When the term ends, the account moves to the solar tariff in effect at that time, which today is SDG&E’s Solar Billing Plan.
- Adding a battery doesn’t change your NEM 2.0 legacy period. Larger batteries come with metering or control requirements so the utility can tell solar exports from battery exports.
- You can add panels up to the greater of 10 percent of your original system size or 1 kW. Going past that risks moving the account to the Solar Billing Plan.
- Selling the home doesn’t end NEM 2.0. The remaining years stay with the meter and pass to the buyer.
- At your annual true-up, extra solar is paid at SDG&E’s net surplus compensation rate, which was about 2.3 cents per kWh in November 2026.
Frequently asked questions
Can I add a battery to my NEM 2.0 solar system?
Yes. Adding storage doesn’t affect your NEM 2.0 legacy period. Batteries over 10 kW usually need a separate solar meter, a non-export setup or a certified control mode, and battery exports charged from the grid don’t earn net metering credit.
How many panels can I add without losing NEM 2.0?
The limit is the greater of 10 percent of your original system’s capacity or 1 kW, and the system still can’t exceed your home’s annual usage. On a 6 kW system, that’s 1 kW, or about two to three modern panels.
What happens to NEM 2.0 when I sell my house?
It stays with the meter. The buyer takes over the remaining years of the original 20-year term. A 2025 bill, AB 942, would have ended legacy net metering at sale, but that language was removed in committee and the bill didn’t pass.
What happens when my 20 years on NEM 2.0 end?
The account moves to the tariff in effect at that time. Today that’s SDG&E’s Solar Billing Plan, where exported solar earns much less, so a battery becomes more valuable as the end date approaches.
What is SDG&E’s net surplus compensation rate?
It’s what SDG&E pays for extra solar left over at your annual true-up. The rate is set monthly from wholesale prices and was $0.02256 per kWh in November 2026, after ranging from about 1.2 to 2.9 cents over the prior year.
If you went solar in San Diego before mid-April 2023, you’re likely on NEM 2.0, the legacy net metering plan that credits exported solar at close to the retail price of the time period you export in. New customers can’t get it anymore. Since 2023, new systems go on the Solar Billing Plan, where exports earn a fraction of that.
That makes NEM 2.0 worth protecting. It also raises fair questions when you’re thinking about a battery, a few more panels, or selling the house. Here’s how the rules work.
How long NEM 2.0 lasts
Under the CPUC’s net metering rules, NEM 2.0 customers can stay on the tariff for 20 years from the date they interconnected. In practice that’s usually your Permission to Operate date. A system turned on in 2018 keeps NEM 2.0 until 2038.
NEM 2.0 also requires a time-of-use rate plan, and you pay a few cents per kWh in non-bypassable charges on the power you pull from the grid. The enrollment window is closed: applications had to be in by April 14, 2023.
Adding a battery
This is the most common question, and the answer is reassuring. Adding battery storage doesn’t affect your NEM 2.0 legacy period. The CPUC’s 2022 decision on the new solar tariff kept that protection, and the utilities’ implementing filings spell it out.
There are technical conditions, and your installer handles them in the interconnection application:
- Batteries of 10 kW or less generally don’t need an extra meter.
- Larger batteries need a separate solar meter, a non-export configuration, or a certified control mode that keeps the battery from exporting power it took from the grid.
- Battery exports charged from the grid don’t earn net metering credit. Exports from solar still do.
What does a battery do for a NEM 2.0 home? Less than it does for a Solar Billing Plan home, but still something. On a time-of-use plan, midday solar is credited at the cheaper midday price, while power you use from 4 to 9 p.m. is billed at the on-peak price. A battery that stores midday solar for the evening captures that spread. The bigger reason most NEM 2.0 owners add one is backup: grid-tied panels shut off in an outage, and a battery is what keeps the house running. We explain why in does solar work when the power goes out?
Adding more panels
You can grow a NEM 2.0 system, but only a little. The limit is the greater of 10 percent of your original system’s capacity or 1 kW, and the system still can’t be larger than your home’s annual usage.
| Original system | Allowed addition |
|---|---|
| 5 kW | 1 kW |
| 8 kW | 1 kW |
| 12 kW | 1.2 kW |
Go past that limit and you risk moving the account to the Solar Billing Plan. San Diego Community Power, which supplies power to many SDG&E customers, states it plainly: accounts transition to the Solar Billing Plan if system capacity increases by more than 10 percent or 1 kW. Some setups meter new panels separately under the newer tariff instead, so ask exactly how SDG&E will treat your addition before you sign anything.
If your household’s usage has grown with an EV, a pool pump or a heat pump, a battery is often the better first move than more panels, because it protects your plan and makes better use of the solar you already have.
Selling the home
Selling doesn’t end NEM 2.0. The legacy status and the remaining years stay with the meter, so the buyer inherits whatever is left of the original 20-year term. SDG&E’s Solar Billing Plan page notes that for new occupants, the legacy period began when the panels were first installed and interconnected.
There was a real scare in 2025. As introduced, a bill called AB 942 would have ended legacy net metering when a home sold. The Senate Energy Committee removed that language in July 2025, according to the committee’s analysis, and the bill didn’t pass. Rules can change, but as of today a NEM 2.0 home carries its plan to the next owner, which is worth mentioning in a listing.
When the 20 years run out
At the end of the term, the account moves to whatever solar tariff is in effect, which today is the Solar Billing Plan. Under that plan, exports earn far less than under NEM 2.0, so the value of storing your own solar goes up. SDG&E’s NEM 2.0 era began in 2016, so the earliest terms end around 2036. That sounds far off, but a battery you add now will still be working when your date arrives, and it’ll matter more on the day you switch.
How your true-up works
NEM 2.0 bills on a 12-month cycle. Charges and credits roll forward month to month, and at your annual true-up you pay what you owe. If you produced more than you used over the year, SDG&E pays for the surplus at its net surplus compensation rate, which it publishes on its true-up rate page. The rate is based on wholesale prices and was $0.02256 per kWh in November 2026, after ranging from about 1.2 to 2.9 cents over the prior year.
That low payout is why oversizing a NEM 2.0 system doesn’t pay. If you’re a San Diego Community Power or Clean Energy Alliance customer, the generation side of your surplus payment comes from your community choice provider rather than SDG&E. Our guide to SDG&E net metering in 2026 covers how NEM 2.0 and the Solar Billing Plan compare.
Protect the plan you have
If you’re on NEM 2.0 and thinking about a battery or a few more panels, Stellar Solar can check your original system size, your interconnection date and your usage, and design an addition that keeps your plan intact. Stellar Solar has been San Diego’s trusted solar installer since 1998, A+ rated with the BBB and a repeat winner of San Diego’s Best Solar in the Union-Tribune Readers Poll. Call 866.787.6527 for a free evaluation, or get your free quote here.
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