The rules of rooftop solar are shifting today. Many states are phasing out generous, retail-rate net metering in favor of discounted net billing and time-varying export credits, with California’s NEM 3.0 being the standout example. Meanwhile, home batteries are gaining more attention as prices trend down and many incentives such as the SGIP in Cailfornia help trim upfront costs.
That leaves many homeowners with a question: is it worth more to send your excess solar back to the grid or store it for your own peak-time use and backup with a home battery system?
This article explores how net metering and home batteries work today, compares their economics under common utility structures, and helps you decide which option makes the most sense for your home.
What Is Net Metering?
Net metering is a billing arrangement that credits homeowners for excess solar power exported to the grid. Historically, there was a catchphrase people used that it was the meter “spinning backward,” but modern programs use smart meters and detailed crediting rules that vary by state and utility.
When your solar system produces more than your home is consuming, the surplus is sent back to the grid and you earn bill credits. Those credits offset the grid electricity you consume at other times (e.g., night). In many places, legacy net metering credit exports at or near retail rates, while newer programs (often called net billing) credit exports at a significantly lower, preset sell rate and net in shorter intervals.
Main Net Metering Types
Full-retail net metering: 1 kWh exported = 1 kWh retail credit. Typically the best financial return for solar-only customers where still available.
Time-of-use (TOU) net metering: Credit value varies by time of day/season. Midday exports are often worth less than evening consumption.
Avoided-cost/net billing crediting: Exports are paid at the utility’s avoided cost (near wholesale), generally much lower than retail.
What Is a Home Battery System?
A home battery system stores electricity, usually from your rooftop solar, so you can use it later instead of pulling power from the grid. In a typical configuration, your panels charge the battery during the day. At night or during peak-rate periods, the battery releases to run your home.
Energy flows from solar into the battery either through direct solar input or through an external inverter. Home batteries with straight solar connection, such as the FranklinWH aPower S, are ideal for new solar projects as they save costs by avoiding purchasing a separate inverter. If you plan to add storage to your existing solar system, it’s recommended to purchase a system agnostic to any solar inverter to eliminate compatibility issues, such as the FranklinWH aPower 2.
While whole-home battery systems still carry relatively high upfront price tags, there are many state, local, and utility incentives that can help take a big bite out of the initial costs, making home energy storage viable and affordable.
Financial Comparison: Value per kWh
The table below compares the value of each kWh produced by home batteries vs. net metering under common utility structures. (i.e., net metering exports earn a utility-set credit, while a home battery allows you to avoid paying your retail rate during steep peak hours.)
| Scenarios | Export Value (Net Metering) | Stored Energy Value (Battery) | Financial Advantage |
| Full-Retail Net Metering | Roughly retail rate (about 16–40¢/kWh depending on state) | Avoids same retail rate (16–40¢/kWh) | Tie: battery adds cost and has longer payback period. |
| TOU Net Metering | Midday exports roughly 4–8¢/kWh under CA NEM 3.0; evening usage can cost roughly 30–70¢/kWh on peak TOU plans | Use stored power to avoid peak rates (often 30–70¢/kWh) | Battery advantage: shift cheap solar to expensive evening demand. |
| Avoided-Cost / Net Billing | Roughly 3–6¢/kWh typical avoided-cost credits | Avoid paying local retail rate (often 16–40¢/kWh) | Clear battery advantage: net metering exports earn wholesale-level rates. |
Sources: Retail price ranges from the EIA (national average and average rates in high-cost states); California NEM 3.0 export values from EnergySage; peak TOU examples from SCE/PG&E/SDG&E rate materials; avoided-cost ranges from Palmetto.
Realistic Scenarios
Let’s walk through three simple scenarios based on the type of net metering your utility offers. In each case, assume your solar system produces 100 kWh of excess electricity per month.
Full-Retail Net Metering
Under full-retail net metering, your utility credits exported solar at the same price you pay for electricity, say, 16¢ per kWh.
- Export 100 kWh: You receive $16 bill credit per month.
- Store 100 kWh and use later: You save $16 in avoided grid costs per month.
Net metering and home battery tie in monthly savings. A typical solar-only system often pays itself off in 7 to10 years (EnergySage). Adding a battery can stretch that payback for a couple of years in a full-retail market.
TOU Net Metering
In TOU-based markets, which is pretty much common in places with high solar penetration such as California, exported energy earns less during midday (when solar is plentiful) and electricity costs more during evening peaks (when solar is unavailable). Let’s assume an 8¢ per kWh midday export rate and 30¢ per kWh peak-rate consumption by referring to the statistics we listed in the table above.
- Export 100 kWh: You receive $8 in monthly bill credits per month.
- Store 100 kWh and use it during peak hours: You save $30 in avoided grid costs per month.
That’s a $22 per month savings for using a battery, or about $264 per year. Therefore, under TOU structures, a home battery notably outperforms net metering in financial benefits, particularly if your household consumes most electricity during evening peak rate hours.
Avoided-Cost Net Metering
Avoided-cost net metering offers the lowest compensation, often resembling wholesale energy pricing. Let' s assume 5¢.
- Export 100 kWh: You receive only $5 credit per month.
- Using the same battery-stored energy during pricey hours: You save $30 in avoided grid costs per month.
The battery provides a $25 monthly advantage, or roughly $300 per year, which is even more compelling than in the TOU structure case because export credits are so low.
More Benefits of Home Batteries
Beyond the bill savings, home batteries offer several advantages that don’t always show up in a payback calculator but matter a great deal in day-to-day life.
- Backup power during outages: A solar-plus-storage setup can operate independently and keep your home continuously powered during grid failures caused by storms, heat waves, or equipment issues. In contrast, standard grid-tied solar-only systems shut down during blackouts for safety (anti-islanding per IEEE 1547).
- Energy autonomy and protection from policy changes: As more states move from traditional net metering to lower-value net billing, storing your own solar is an effective way to reduce exposure to shifting export rules and rising electricity prices.
- Improved sustainability: Using your own stored solar in the evening or overnight reduces your dependence on grid electricity, which is often sourced from fossil fuels. This allows homeowners to maximize their clean energy use and lower their carbon footprint.
These soft values oftentimes make home batteries a more compelling choice despite longer payback periods under the retail-rate market, because they give homeowners resiliency, predictability, and greater control over their energy future.
Which Option Is Right for You
Choose Net Metering
If your state still offers favorable full-retail net metering and your main goal is a fast return on investment, you are advised to go for net metering.
Choose Battery Storage
It’s recommended to install battery storage if:
- Your utility uses TOU or avoided-cost export structures.
- You experience frequent grid outages or live in an area with energy reliability concerns and want backup power.
- You value long-term energy autonomy, aiming to reduce reliance on the grid and shield yourself from policy changes, rising utility rates, and export credit cuts.
Best of Both Worlds
Combine solar, home battery and net billing: store solar first, then export only surplus power during high-rate periods. For example, the FranklinWH System intelligently adapts to each NBT's real-time grid compensation values, exporting excess energy to the grid during peak-pricing periods (eg., 6 PM to 8 PM on weekdays). By lining up with peak pricing windows, the system helps you maximize earned energy credits.
Expand solar while preserving your favorable old net metering benefits: if you have legacy solar enrolled under a favorable old net metering rate, you can increase solar production and add batteries. The FranklinWH System offers advanced energy management and battery storage while allowing your existing solar to keep sending energy back to the grid under pre-existing net metering terms.
