NEM 3.0 Battery Sizing for California: How Much Storage Do You Actually Need?

Under NEM 3.0, exported solar earns about $0.05–$0.08/kWh in California, while imported electricity from the grid costs $0.32–$0.55/kWh during evening TOU peak hours. The arbitrage opportunity is obvious: store your daytime solar production, use it during peak evening hours, avoid the import rates entirely. The question is how much battery you actually need to do this profitably.

The core insight: you are sizing to peak evening import, not total daily consumption

The mistake most installers make is sizing battery to "100% of daily consumption" or some round percentage. That is wrong. Under NEM 3.0, your goal is specifically to avoid peak-hour imports. Off-peak hours (overnight, weekends in many TOU schedules) still net out close to retail anyway.

For most California TOU schedules (PG&E E-TOU-C/D, SCE TOU-D-PRIME, SDG&E EV-TOU-5), peak runs roughly 4pm–9pm weekdays. That is a 5-hour window. Your battery needs to cover consumption during that 5-hour window, not 24 hours.

The math by household type

Average California household evening consumption (4pm–9pm):

• Small household, no AC: ~5 kWh
• Average household, occasional AC: ~8–10 kWh
• EV-charging household, evening AC: ~12–18 kWh
• Large home + pool pump + EV: ~18–25 kWh

The right battery sizing roughly matches the evening peak window. A 13.5 kWh Powerwall covers the second category well. Two Powerwalls (27 kWh) cover the third and fourth. A single 10 kWh Enphase 5P plus solar self-consumption during peak covers the first.

The depth-of-discharge gotcha

Battery datasheets quote "nominal capacity." Usable capacity is lower — typically 90–95% for LFP chemistries (Tesla Powerwall 3, Enphase 5P) and 80–90% for older NMC chemistries. Always size by usable capacity, not nominal.

Also: cycling a battery to 100% depth daily shortens lifespan. For meaningful 10–15 year warranty alignment, plan to cycle to 85–90% daily max.

Resilience vs arbitrage: a different sizing conversation

If your goal is power-outage resilience (PSPS events, wildfire shutoffs), the sizing math is different. You are sizing for how long you want to ride out an outage with your essential loads. For a typical California household:

• 24-hour outage with fridge + lights + internet + 1 small AC unit: ~10–14 kWh
• 48-hour outage same loads: ~20–28 kWh
• 72-hour outage same loads: ~30+ kWh

If you size for both arbitrage AND resilience, the resilience number wins (it is bigger).

Charging from grid: NEM 3.0 prohibits grid-charging for export-credit purposes

You cannot charge your battery off cheap overnight grid power and then export during peak for credit — California regulations explicitly prohibit it. Your battery must be charged from solar to earn any export credits on subsequent discharge.

This matters because in low-sun winter months, your battery may not fully charge most days. Plan for 60–70% utilization in December/January, not 100%.

The Solarfying take

For most California families in 2026, a 13.5 kWh battery (single Powerwall 3 or equivalent) handles arbitrage well. Double it (27 kWh) if you have an EV or run AC heavily through summer evenings. Triple it (40+ kWh) only if you specifically want multi-day off-grid resilience.

Installers who quote you a 20+ kWh battery as default for an average household are either inflating the proposal or treating you as a luxury buyer. Get a second opinion. reviewingsolar.com sizes batteries without selling them.