Why the LA city line matters so much for solar
Inside LADWP (City of LA)
Retail rate net metering, running since 1999. Exports bank at the same price you pay, credits roll over without expiring, systems up to 1 MW. One of the most favorable arrangements left in California.
Across the line on SCE
NEM 3.0 credits exports at avoided cost, averaging about 3 to 4 cents. The same panels on the same roof earn dramatically less for surplus power a few blocks away.
How LADWP net metering works, and what it pays
LADWP net metering is the reason rooftop solar still pencils out so well in the City of Los Angeles. Because LADWP is a municipal utility governed by the city, not the California Public Utilities Commission, the state's NEM 3.0 (the Net Billing Tariff) does not apply here. LADWP runs its own net energy metering program, which has operated since 1999 and still credits exports at close to the full retail rate.
The basics: a near one-for-one retail credit
A bidirectional meter tracks power in both directions. The solar you use the moment you generate it simply reduces what you pull from the grid. The surplus you export is credited against the grid power you use at other times, at close to the full retail rate, roughly 24 to 29 cents per kWh depending on your tier and season. That is nearly a one-for-one (1:1) trade: the price you pay to buy power is close to what your exports are worth.
What LADWP pays for exported solar, versus NEM 3.0
The contrast with the investor-owned utilities is stark. The same panels on the same roof earn far more inside LADWP than a few blocks away on SCE:
| Value of one exported kWh | LADWP (municipal NEM) | SCE, PG&E, SDG&E (NEM 3.0) |
|---|---|---|
| Credit basis | Close to full retail rate | Avoided-cost export rate |
| Roughly per kWh | about 24 to 29 cents | about 3 to 4 cents |
| Battery needed for the economics? | Not required | Usually, to avoid exporting cheap |
Retail-rate figures reflect LADWP's R-1A residential tariff; NEM 3.0 export values are the CPUC avoided-cost averages. Confirm current numbers before sizing a system.
Key terms of the LADWP program
- System size cap: a net-metered system cannot exceed 1 MW for a single customer, far above any home rooftop. There is no territory-wide enrollment cap.
- Credit roll-over: net excess credits carry forward month to month and do not expire, with an annual true-up.
- What credits cannot do: they do not offset fixed charges such as the monthly minimum, and any leftover credit is forfeited if you close the account. LADWP does not cut a check for a large annual surplus, so sizing far beyond your usage gives value away.
- Eligibility and sign-up: you or your installer apply to interconnect the system with LADWP, pass inspection and approval, and LADWP switches you to net metering billing. Installers normally handle this paperwork.
Because exported power is worth close to retail here, a well sized LADWP system can bank summer surplus at nearly full value and draw it down later. That is why LADWP net metering remains one of the most favorable arrangements left in California, even as the rest of the state moved to NEM 3.0.
Current residential rates
LADWP residential customers are on a tiered rate (R-1A), where the price per kWh steps up as monthly usage rises, with higher tiers only in summer. The all-in rates below are a spring 2026 snapshot from the OpenEI Utility Rate Database. Treat them as a reference point rather than today's bill, because of how LADWP prices electricity: see the note below on adjustment factors.
| Plan | Energy charge | Fixed / basic |
|---|---|---|
| R-1A Tier 1 (and all winter usage) | about 24.2c per kWh | $10/mo minimum charge |
| R-1A Tier 2 (summer, mid usage) | about 25.7c per kWh | included above |
| R-1A Tier 3 (summer, high usage) | about 29.2c per kWh | included above |
Tier breakpoints depend on your service zone (Zone 1 or Zone 2). Winter (October to May) is a flat rate across tiers; tiering only applies in summer. Two things make any single cents-per-kWh figure for LADWP go stale quickly, including the one above. First, what you pay is a base rate plus adjustment factors, and those factors are revised on a recurring basis rather than annually, so the all-in price moves during the year even when the base rate does not. On recent bills those pass-through adjustments have made up a large share of the total per-kWh price, not a rounding error. Second, summer pricing runs higher than the spring figures above, both because the upper tiers switch on and because summer adjustment factors have been higher. Many Los Angeles households also pay the city's 10 percent Electricity Users Tax on top of electric charges. For the exact number on your own bill, read the rate line on the bill itself or LADWP's current rate schedule, which is the only source that is authoritative for the quarter you are actually in.
LADWP rate increases over time
Los Angeles Department of Water and Power's average residential electricity price has risen from 15.38 cents per kWh in 2015 to 26.48 cents in 2025, an increase of about 72 percent, or roughly 5.6 percent per year. The chart compares LADWP (solid) against the state residential average (dashed). Hover any point for the exact figure.
What the exception is worth
LADWP's retail rate netting means a well sized system can bank summer surplus at full value and spend it later, which makes solar attractive here without necessarily adding a battery for the economics.
The trade-off: LADWP's rates are lower than SCE's, so each offset kWh saves less and payback stretches longer than a high rate utility would deliver. Credits also cannot offset the fixed monthly minimum, and leftover credit is forfeited if you close the account. Get a site-specific quote before sizing anything.
What rising LADWP rates could cost you
LADWP rates have risen about 5.6% per year. Enter your bill to see what that pace of increase could compound to over time, and what you have likely already absorbed. This is an estimate, not a guarantee.
Estimate only. Projects your current bill forward at LADWP's historical average rate increase (5.6% per year, from EIA data); it assumes your usage stays the same except for any add-ons you select. Actual rates depend on your usage, rate plan, and the utility's future filings, and are not guaranteed. This is general information, not financial advice.
LADWP service area
LADWP provides residential electric service to the City of Los Angeles.
Its service area spans 132 ZIP codes. A ZIP lookup tool to confirm coverage for a specific address is coming to this site.
Full data and sources
Per-utility prices are computed from EIA Form 861 (bundled residential revenue divided by sales), which reconciles to the EIA's published figures. The state average comes from EIA retail-sales data. These are public-domain U.S. government data.
| Year | LADWP (c/kWh) | State avg (c/kWh) |
|---|---|---|
| 2015 | 15.38 | 16.99 |
| 2016 | 15.26 | 17.39 |
| 2017 | 16.65 | 18.31 |
| 2018 | 18.31 | 18.84 |
| 2019 | 19.99 | 19.15 |
| 2020 | 20.63 | 20.45 |
| 2021 | 21.19 | 22.82 |
| 2022 | 22.24 | 25.84 |
| 2023 | 22.99 | 29.51 |
| 2024 | 23.84 | 31.97 |
| 2025 | 26.48 | 32.54 |
Sources: EIA Form 861 (per-utility sales, revenue, and price) · EIA Electric Sales, Revenue, and Average Price (Table 6) · LADWP residential electric rates · LADWP net energy metering
FAQ
Does LADWP have net metering?
Yes. LADWP runs its own net energy metering program, separate from California's NEM 3.0. Rooftop solar customers in the City of Los Angeles can interconnect and be credited for the power they export to the grid.
How does LADWP net metering work?
A bidirectional meter tracks power both ways. Solar you use on site cuts your bill directly, and surplus you export is credited against the grid power you use at other times, at close to the full retail rate. Net excess credits carry forward and are trued up over the year.
What does LADWP pay for excess solar?
LADWP credits exported solar at close to the retail rate you pay, roughly 24 to 29 cents per kWh depending on tier and season, rather than the 3 to 4 cent avoided-cost rate the investor-owned utilities pay under NEM 3.0.
Does NEM 3.0 apply to LADWP customers?
No. LADWP is a municipal utility governed by the City of Los Angeles, not the CPUC, so California's NEM 3.0 does not apply. LADWP runs its own net energy metering program and credits exports at close to the full retail rate.
Is there a system size limit for LADWP net metering?
Yes. A net-metered system cannot exceed 1 megawatt for a single customer, which is far above any residential rooftop system. There is no cap on how many customers across LADWP's territory can enroll.
How do I sign up for LADWP net metering?
You or your installer apply to interconnect the system with LADWP, pass the required inspection and approval, and LADWP switches you to net metering billing. Your installer normally handles the paperwork as part of the project.
What happens to solar credits I do not use?
Net excess credits roll over and do not expire. They cannot offset fixed charges such as the monthly minimum, and any remaining credit is forfeited if you close the account.
Is solar worth less on LADWP than on SCE?
Each exported kWh is worth more on LADWP because of retail-rate netting, but each offset kWh saves less because LADWP's prices are lower than SCE's. Which effect wins depends on your usage pattern and system size.
How do I know if my address is LADWP or SCE?
LADWP serves the City of Los Angeles proper. Check your electric bill: if it comes from LADWP you are on the municipal program, and if it comes from SCE you are under NEM 3.0.