LADWP vs. NEM 3.0: Why Los Angeles Is Different
When California switched to NEM 3.0 in April 2023, it drastically cut export credits for customers of PG&E, SCE, and SDG&E — the three investor-owned utilities. Export rates fell from ~29¢/kWh to 5–8¢/kWh (avoided cost). But LADWP is a municipal utility and not subject to NEM 3.0.
LADWP customers receive full 1:1 retail-rate net metering at 22–34¢/kWh for exported solar. This makes the LA payback period and ROI dramatically better than in San Francisco, San Diego, or most of Southern California served by SCE. If you are in the LADWP service territory, this is one of the strongest net metering situations in California.
Solar System Cost in Los Angeles by Size (2026)
| System Size | Gross Cost | Annual Output (LA) | Annual Savings | Payback |
|---|---|---|---|---|
| 5 kW | $14,000 | 8,110 kWh | $2,456/yr | 5.7 yrs |
| 6 kW | $16,800 | 9,730 kWh | $2,947/yr | 5.7 yrs |
| 8 kW | $22,400 | 12,973 kWh | $3,929/yr | 3.8 yrs |
| 10 kW | $28,000 | 16,216 kWh | $4,911/yr | 5.7 yrs |
Based on $2.80/W avg, 1,622 kWh/kWp PVGIS yield, 30.29¢/kWh LADWP rate, 90% bill offset. No federal ITC (expired Dec 2025). Source: PVGIS, EIA.
Los Angeles Solar Incentives in 2026
| Incentive | Status | Value (8 kW system) | Notes |
|---|---|---|---|
| Federal ITC (Section 25D) | ❌ Expired | $0 | Expired December 31, 2025 |
| CA Property Tax Exemption | ✅ Active | ~$300–600/yr | Solar added value excluded from assessment through Jan 2027 |
| LADWP Net Metering | ✅ Active | $800–1,500/yr | Full 1:1 retail rate; far better than NEM 3.0 |
| SGIP Battery Rebate | ✅ Active | $2,025–13,500 | $150–1,000/kWh for storage; income-qualified gets more |
| CA Sales Tax Exemption | ❌ No | $0 | CA does not exempt solar from sales tax |
What's Happening with Solar in Los Angeles (April 2026)
Mayor Karen Bass launched the largest streetlight infrastructure investment in LA history, replacing up to 60,000 streetlights with solar-powered units by 2035. The $65M initiative signals strong municipal commitment to solar infrastructure across the city. Source: LA Mayor's Office →
While the rest of California moved to NEM 3.0 export rates of 5–8¢/kWh, LADWP customers continue receiving full retail-rate credits of 22–34¢/kWh. This policy advantage makes LADWP-connected systems some of the most financially attractive in the state. Source: EnergySage →
California's property tax exclusion for solar installations remains active through January 1, 2027. Homeowners who install solar panels will not see their property assessment increase due to the added home value — saving $300–600/year in property taxes depending on the assessed value increase.
Monthly Solar Output in Los Angeles
| Month | Yield (kWh/kWp) | 8 kW Output | Monthly Savings |
|---|---|---|---|
| January | 116 | 928 kWh | $281 |
| February | 127 | 1,016 kWh | $308 |
| March | 152 | 1,216 kWh | $368 |
| April | 160 | 1,280 kWh | $388 |
| May | 165 | 1,320 kWh | $400 |
| June | 168 | 1,344 kWh | $407 |
| July | 174 | 1,392 kWh | $422 |
| August | 168 | 1,344 kWh | $407 |
| September | 154 | 1,232 kWh | $373 |
| October | 141 | 1,128 kWh | $342 |
| November | 119 | 952 kWh | $288 |
| December | 108 | 864 kWh | $262 |
Source: PVGIS v5.3 for 34.05°N, 118.24°W. Savings at 30.29¢/kWh.
Frequently Asked Questions
How much do solar panels cost in Los Angeles in 2026?
Does LADWP have NEM 3.0?
Is solar worth it in Los Angeles in 2026?
What is the SGIP battery rebate in Los Angeles?
How long does solar installation take in Los Angeles?
Sources:
• PVGIS v5.3 — EU JRC Solar Yield Data for Los Angeles
• EIA — California Electricity Profile (electricity rates)
• LADWP — Solar Power Program & Net Metering
• CPUC — Self-Generation Incentive Program (SGIP)
See Real PVGIS Data for Los Angeles
Our city data page shows monthly solar yield, battery ROI, and sizing tables specific to Los Angeles — all based on satellite measurements.