Claire WhitakerBy Claire Whitaker

Updated November 2026

Net metering vs gross metering vs net billing comes down to one question: how does your utility value the electricity your panels send back to the grid? In short, net metering credits your exports at the full retail rate, gross metering pays for every exported kilowatt-hour separately, and net billing credits exports at a lower, usually time-variable rate. This guide explains how each system works, how to compare them for your home, and what to check before you sign an interconnection agreement.

Start With What Each System Actually Measures

All three systems use the same basic hardware: a bidirectional meter that records power flowing in and out of your home. The difference is how the utility translates those readings into a bill credit.

Shopping for one? See our guide: SoCal Edison Net Metering vs Net Billing (2026): Which Is Better for Homeowners?.

  • Net metering: The meter subtracts exports from imports over a billing period. You pay only for the net amount you used. Excess credits often roll forward month to month.
  • Gross metering: Two meters, or a single meter with separate registers, track consumption and generation independently. You pay for everything you draw from the grid and receive a separate payment, typically at a fixed rate, for everything you export.
  • Net billing: Exports are valued at a different rate than the retail price you pay for imports. That export rate is often tied to wholesale prices or the hour of the day, so it can be well below the retail rate.

How the Money Plays Out on Your Bill

The biggest practical difference is the value of each kilowatt-hour you send to the grid. Under net metering, a kWh you export offsets a kWh you would otherwise buy, so it is worth the full retail rate. Under gross metering, the export payment is a separate line item, and its rate is set by the utility or regulator. Under net billing, the export rate is set directly, and it may vary by hour.

Because solar output peaks around midday, when many homes are using little power, net billing with time-variable export rates can lower the value of your system compared with net metering. Homes that use most of their power in the evening often see the gap more clearly.

Compare the Three Options for Your Home

Before you choose a system size or a battery, find out which compensation scheme your utility uses. Many states and utilities have moved from net metering to net billing for new customers, and the rules can change through a regulatory filing. Use this table as a starting point:

Factor Net Metering Gross Metering Net Billing
Export value Usually full retail rate Fixed export rate Set rate, often lower or time-based
Bill structure Single net bill Separate import and export charges Imports at retail, exports at set rate
Storage impact Batteries add less value Batteries can shift exports Batteries often add significant value
Sizing tip Often sized to annual usage Often sized for self-consumption Sized for self-consumption and evening use

Steps to Evaluate Your Options

  1. Find your utility’s current tariff sheet or net metering page and confirm which scheme applies to new systems.
  2. Pull 12 months of your interval or monthly usage data to see when you draw power.
  3. Estimate how much of your solar output you will use on site versus export.
  4. Compare the export rate or credit method against your own usage pattern.
  5. Ask your installer to model your bill under each scheme before you sign.

Common Mistakes

  • Assuming net metering still applies because a neighbor has it. Grandfathering rules often depend on your interconnection date.
  • Sizing a system only to offset annual kWh, which can leave a large portion of output exported at low value under net billing.
  • Ignoring fixed monthly charges, which remain under all three systems.
  • Comparing export rates without checking whether they change by season or hour.
  • Skipping a bill simulation. A short model often shows which scheme fits your load pattern.
  • A home energy monitor with circuit-level tracking helps you see when your panels produce and when you draw power, which is the data you need for any scheme comparison. View on Amazon
  • A basic whole-home energy meter lets you verify utility readings against your own data. View on Amazon

FAQ

Is net metering better than net billing?

Usually, yes, for export value, because exports are credited at or near the retail rate. However, net billing can still work well for homes that use most of their solar output on site.

Can I switch from net billing to net metering?

Generally no. Scheme eligibility is tied to your interconnection date and utility rules, so check with your utility before assuming a change is possible.

Does gross metering require two meters?

Not always. Some utilities use one meter with separate registers, while others install a second meter. Confirm the setup with your utility or installer.

Conclusion

Net metering, gross metering and net billing differ mainly in how exports are valued, and that value shapes how big your system should be and whether a battery makes sense. Start by confirming which scheme your utility applies to new systems. Then model your own usage before committing, and consult a licensed installer or your utility for final bill estimates.

Ready to choose one?

Claire Whitaker

About Claire Whitaker

Claire Whitaker is part of our editorial team and reviews and edits our home solar guides, checking product details against manufacturer specifications and owner feedback.