Thinking about solar for a Los Angeles home, or comparing two listings that already have panels? The rules you fall under can change your savings and your resale story. In L.A., most homes are served by either LADWP or Southern California Edison (SCE), and each utility handles solar credits and interconnection differently. In this guide, you’ll learn how the two frameworks compare, how batteries affect payback, and what to ask before you buy or sell a solar home. Let’s dive in.
LADWP vs. SCE: Why this choice matters
Two different rulebooks
If you are in SCE territory, new residential solar interconnections follow the California Public Utilities Commission’s Net Billing Tariff, often called NEM 3.0. Under this framework, exported solar is credited at an hourly avoided-cost value rather than the full retail rate. If you are in LADWP territory, the City of Los Angeles sets its own policies and rate schedules, so export credits and netting rules can differ.
Utility rules change over time. Before you commit to an installation or make a pricing decision on a solar home, confirm the current export credit method, netting period, and rate schedule with the applicable utility.
What drives your bill
Three pieces work together to shape your savings under both utilities:
- Time-of-use rates: The price you pay for grid power varies by time of day and season.
- Export compensation: The value you receive for sending energy back to the grid.
- Netting period: How the utility tallies your imports and exports for billing.
Small differences here can change payback and your resale talking points.
SCE’s Net Billing Tariff in plain English
Lower export credit, higher value for self-use
Under SCE’s Net Billing Tariff for new customers, exported solar is credited at a time-varying, hourly avoided-cost rate. This is usually lower than the retail rate. As a result, you benefit more by using your solar on-site instead of exporting it. That is why batteries and smart load shifting can improve the economics for many SCE households.
Check for grandfathering
If a system was interconnected under older NEM rules, it may have a legacy status. Ask for the interconnection agreement and the current rate plan to verify whether the home is on a legacy program or the newer Net Billing Tariff.
LADWP’s municipal approach
LADWP sets its own net energy rules, rate schedules, and netting windows. Historically, some municipal utilities paid closer to retail for exports, but LADWP updates its policies independently. If LADWP’s export compensation is favorable, a PV-only system may pencil well for many households, especially if someone is home during midday to self-consume. Always verify the current LADWP export method and whether netting is hourly or monthly.
Interconnection: process, fees, and timing
SCE overview
New residential systems generally follow Rule 21 procedures. Steps can include an application, technical review, meter work, and permission to operate. In some cases, the utility may flag transformer capacity or service upgrades, which can add time or cost.
LADWP overview
LADWP has its own interconnection application, equipment standards, and schedule. Municipal processes can be streamlined for small residential systems, but timelines still depend on workload, meter changes, and any needed upgrades. Ask your installer for realistic timelines so you can plan around a move or sale.
Common friction points
- Meter swaps for bi-directional metering
- Transformer or service capacity constraints
- Final inspections and paperwork needed before permission to operate
Batteries: when they help and how to size
Why batteries matter more in SCE territory
When export credits are much lower than retail rates, a battery can store your midday solar and discharge it during high-priced evening periods. That boosts self-consumption and often shortens simple payback compared with a PV-only system under the Net Billing Tariff. A battery also offers resilience during outages, which many L.A. homeowners value.
What drives battery value
- The spread between what evening power costs you and what you would have earned for exporting midday solar
- Battery roundtrip efficiency and long-term cycle life
- Time-of-use windows, especially late afternoon and evening
- Battery size relative to your daily solar production and household load
Practical sizing and settings
- Resilience-focused: 5–20 kWh usable capacity, tuned to keep essentials powered during outages
- Bill-savings-focused: often 3–13 kWh for typical homes, modeled to capture excess midday solar and offset evening peaks
- Operating modes: solar-first charging, TOU arbitrage, or a hybrid approach with a backup reserve
Incentives to ask about
Federal Investment Tax Credit rules may apply to residential solar and to storage paired with solar if IRS requirements are met. California’s Self-Generation Incentive Program can offer storage rebates, subject to eligibility and fund availability. LADWP and SCE may also run periodic programs for storage or demand response. Confirm current terms before you budget.
Decision guide: Which setup fits your home
If you are in LADWP territory
- Start by checking LADWP’s export compensation and netting rules. If credits are close to retail and your daytime usage is moderate to high, a PV-only system can work well.
- Consider a battery if you want outage backup, plan to reduce evening imports, or want to future-proof against rate changes.
If you are in SCE territory
- Expect lower export credits for new interconnections. Batteries and self-consumption strategies often improve the economics.
- Run a 12-month bill simulation using your actual load profile, TOU windows, export values, and battery specs.
If you are selling soon
- In LADWP: An owned, permitted PV system with strong production history can be a selling point. Keep documentation ready to support buyer due diligence.
- In SCE: A PV-only system may show smaller bill reductions under the Net Billing Tariff. A battery can strengthen the value story, but weigh the cost, timing, and permit path if you plan to install right before listing.
Buyer and seller checklists
Confirm your utility
- Verify whether the property is served by LADWP or SCE. The utility determines interconnection rules, export credits, and TOU rates.
Gather system paperwork
- Ownership status: owned, financed, leased, or PPA
- Interconnection agreement and current rate schedule
- Permit records and final inspection approvals
- 12–24 months of solar production and electric bills
- Equipment list: panels, inverter, battery model, warranties, age
- Maintenance logs and monitoring access
Understand billing and rates
- Which TOU plan is active, and what are the peak windows
- For SCE: legacy NEM or Net Billing Tariff, and how exports are credited
- For LADWP: export compensation method and netting period
Battery-specific questions
- Usable capacity, roundtrip efficiency, warranty cycles, and depth of discharge
- Current operating mode: backup priority, bill savings, or hybrid
- Any outstanding incentive obligations or paperwork that must transfer
Sale and escrow items
- Any liens or loans tied to the system, plus payoff or transfer instructions
- Lease or PPA transfer terms and potential buyout amount
- Appraisal addenda or valuation notes related to PV or storage
- Title and disclosure requirements for solar contracts
Interconnection and permit timing
- Expected timelines for permits, meter work, and permission to operate
- Plan for possible delays so they do not impact closing
Quick scenarios to make it real
- SCE home with high evening use: A battery often improves payback by shifting midday solar to late-day peaks while export credits are low.
- LADWP home with someone home midday: PV-only can be attractive due to natural self-consumption. A battery still adds resilience and evening coverage.
- Seller adding solar before listing: Confirm timelines, interconnection steps, and whether the buyer can assume any financing or incentives without slowing escrow.
Where to verify current rules
- LADWP: Solar program details, export compensation, and residential TOU rate schedules
- Southern California Edison: Residential solar interconnection, Net Billing Tariff information, and TOU plans
- CPUC: Decisions that define the Net Billing Tariff for investor-owned utilities
- IRS guidance: Residential energy credits and eligibility for storage paired with solar
- California SGIP: Storage incentive availability and requirements
- DSIRE: Overview of state and local incentives across California
Final thoughts
Your utility drives the solar story in Los Angeles. If you are in SCE territory under the Net Billing Tariff, focus on self-consumption and consider a battery. If you are in LADWP territory, verify current export rules to judge whether PV-only meets your goals, then decide if storage adds value for backup and evening coverage. When buying or selling, collect the right paperwork, verify interconnection status, and model bills using real data so you can negotiate with confidence.
If you want a clear plan for your next move, reach out to Karean Wrightson for local guidance on due diligence, disclosures, and how solar and storage can support your goals. Request a Complimentary Market Consultation.
FAQs
How does SCE’s Net Billing Tariff impact a new solar home in Los Angeles?
- New SCE interconnections credit exports at time-varying avoided-cost rates, so self-consumption and batteries often create better savings than exporting midday energy.
What should I confirm about an existing solar system in LADWP territory before I buy?
- Ask for the interconnection agreement, current rate plan, export compensation method, netting period, permit finals, production history, and all equipment and warranty documents.
Will a battery improve payback for my SCE home?
- Often yes, because a battery stores low-value midday solar and offsets higher-priced evening imports, but you should model savings with your actual usage and rate windows.
If I am selling a home with a leased or PPA solar system, what do buyers need?
- Provide the lease or PPA transfer process, any buyout options, monthly payment terms, contract length, and confirm whether the lender and title company will require additional documents.
How do I check whether a property is LADWP or SCE?
- Review recent electric bills, utility account details, or the seller’s disclosures; the serving utility determines interconnection, export credits, and TOU rates.
Do batteries qualify for incentives in Los Angeles?
- Storage can qualify under programs like the federal Investment Tax Credit when paired with solar if IRS rules are met, and SGIP may offer storage rebates depending on eligibility and funding.
