The final electric bill on a West Hills sale arrives a few weeks after closing. For a seller with rooftop solar, there is one detail on it that many don't expect. LADWP's Net Energy Metering rider says that when a credit balance is left at the time a customer ends service, "the balance will automatically be adjusted to zero and the customer shall be owed no further compensation for excess generation." LADWP doesn't refund those credits and doesn't move them to the buyer. They are simply gone.
That clause comes from a rider LADWP lists as effective September 1, 2008. The same rider decides what every customer-owned array on a West Hills roof is worth. Until now it has been one of the most generous solar arrangements in Southern California. Last month the LADWP Board of Water and Power Commissioners started a review of the rate structure those credits are calculated from.
The credit is real money until the day service ends
The billing rules are short. In a billing period where the panels send more power to the grid than the home draws, LADWP calculates a credit "using the applicable Rate Schedule energy pricing." Leftover credit rolls forward to later bills, though it can't be used against taxes or minimum charges. It applies only to the bill tied to the meter that recorded the excess power.
Those credits stay on the books only while the seller is the customer of record. A seller who heads into escrow after a sunny stretch with a large balance should expect to lose whatever hasn't been used by the time service is closed. It's a small line item compared with the sale price, but it often comes as a surprise. Sellers sorting through what they'll actually walk away with can read our West Hills net proceeds guide, which covers the larger deductions.
The same panels earn a different credit over the hill
The credit's value depends on which utility serves the address. Southern California Edison lists Hidden Hills, Calabasas and Santa Clarita among the cities it serves. Buyers who compare solar homes across that line are comparing two different rulebooks.
| West Hills, LADWP | Hidden Hills, Calabasas, Santa Clarita, SCE | |
|---|---|---|
| Rule in force | NEM rider effective September 1, 2008 | Net Billing Tariff for applications since April 15, 2023; legacy NEM 1.0 and 2.0 for older systems |
| How exports are credited | At the rate schedule's energy pricing | Net Billing: a grid-value rate, usually below retail. Legacy NEM: retail |
| Time limit in the rule | None stated in the rider | Legacy NEM: 20 years from permission to operate |
| Rate plan required | Customer's applicable schedule | Net Billing residential customers use TOU-D-PRIME |
LAist reported in September 2025 that LADWP net-metering credits "match the rates customers pay for their energy usage," and that new rooftop solar customers in SCE territory "get paid back about 75% less than the rate." The same article quoted UC Berkeley Haas Energy Institute director Severin Borenstein saying LADWP has "far more generous net energy metering than most other municipal utilities."
That puts a recently installed array on a West Hills roof in a different category from an array of the same size and age in Valencia. The Santa Clarita owner who connected after April 2023 earns the lower grid-value export credit. The West Hills owner earns credits at the rate schedule's energy price. On the SCE side, the transfer question has a clear answer. SCE says a buyer who moves into a home with an eligible existing system of less than 30 kW is automatically enrolled in NEM when they start service.
No end date also means no guarantee
The 20-year legacy period at SCE tells an owner how long the current terms will last. LADWP's rider sets no period at all. An open-ended rule like that pays well as long as it lasts, and LADWP has said it plans to look at it again.
In the same LAist story, David Jacot, LADWP's director of distributed energy solutions, explained the utility's position:
"The net energy metering program that we currently have will most likely get revisited in our next power rate action, but we don't have any timeline on exactly what that's going to look like. In the meantime, we can pursue what we're doing on the battery side while [net energy metering] is currently operating as is."
He also told LAist, "Frankly, we don't want to encourage solar-only projects at this point. We really want to get the batteries," because demand rises in the evening just as panels stop producing.
On Tuesday, October 27, 2026, the Board adopted a resolution directing LADWP to "review the electric rate ordinance and develop recommendations addressing rate factors, levels, tiers and seasonality," and to examine "alternative rate structures, including potential City Charter amendments, related to limitations imposed by Proposition 26." Board President Allan Marks strongly endorsed modernizing the rate structure, a step LADWP's release notes would require City Council action. The resolution also suspends residential disconnections for non-payment through the end of 2026 and steers customers toward Level Pay and the Power Savers smart thermostat program.
A West Hills solar credit is calculated from the rate schedule's energy pricing, and tiers and seasonality are part of that pricing. That puts solar credits inside the scope of this review.
Higher rates make the array worth more, and make the review matter more
The current rate table shows why the review is getting so much attention. On LADWP's standard R-1A residential rate, with adjustment factors included, Tier 1 cost $0.24604 per kWh in October through December 2025. For October through December 2026 it is $0.27292. Tier 2 went from $0.30463 to $0.33151 over the same quarters. LADWP's release puts the overall electric rate increase at 7 percent since last year, driven mainly by reliability investments.
For a West Hills household with solar, every kilowatt-hour the panels supply directly is one less kilowatt-hour bought at those prices. So the array is worth more this quarter than it was a year ago. The Board's resolution cites summer bills as the reason for the review: median customer electricity use rose 15 to 20 percent in recent bimonthly billing periods compared with summer 2025, after record-high temperatures.
A solar home in West Hills gains value from rising rates, and the rate structure behind that value is now under review. Both facts should go into how a buyer weighs the panels in an offer and how a seller describes them in a listing.
Questions to settle before the panels go into the price
Each of these comes up in a solar sale. The answers usually take some time to track down.
- Who owns the system? LADWP's rider applies to a customer who "owns and operates" the generating facility. With leased and PPA systems, the solar provider owns the equipment. The CPUC's California Solar Consumer Protection Guide says that when the home sells, the buyer may take over the contract, the seller may keep paying, or the seller may buy the system out, and a buyout can cost thousands of dollars.
- Is there a UCC-1 filing? Freddie Mac's Guide tells lenders to review any UCC-1 financing statement or lease agreement tied to the panels to see whether a lien is against the real estate or the solar panels. Freddie Mac's solar panel FAQ also notes that a release or subordination may be needed where the filing is treated as a general lien on the property. On the financing side, this is often what slows an escrow down.
- How will the account move to the buyer? LADWP's NEM guidelines require a customer-owned system on the customer's premises and say the LADWP customer of record must sign an interconnection agreement where one is required. The utility's NEM documents page lists a Small System Interconnection Agreement marked effective 7/5/23 and a Declaration of Ownership form for new interconnections. Buyers should call LADWP early in escrow and ask exactly what a new owner needs to sign for this particular meter.
- What does the credit balance look like? Because unused credit is set to zero when the seller's service ends, both sides benefit from looking at recent bills before the closing date is set.
Everything above is general information about utility rules and contracts. It isn't legal, tax or financial advice, so confirm your own situation with LADWP, your solar provider, your lender or an attorney.
A few questions West Hills owners ask
Is my LADWP solar credit changing this year? The rider in effect today is the one dated September 1, 2008. The October 27 resolution directs LADWP to review the rate ordinance and develop recommendations, and LADWP's own staff told LAist in 2025 that net metering would most likely be revisited in the next rate action.
Could SCE's legacy terms change at the point of sale? In a December 13, 2024 report, the CPUC's Public Advocates Office recommended moving legacy NEM accounts to the Net Billing Tariff when a property sells. That was a policy recommendation from the advocates' office, not a CPUC rule. For now, SCE's own FAQ describes automatic NEM enrollment for buyers of homes with eligible systems of less than 30 kW.
Where can I see current LADWP rates? LADWP posts the full residential schedule, the NEM rider text included, on its residential rates page. The adjustment factors are updated in January, April, July and October.
If you're pricing a West Hills home that has panels, or weighing one against a home across the SCE line, Sterling Realty & Lending can review the solar contract, any UCC-1 filing and the financing with you before they turn into escrow problems. Schedule a free consultation, and bring your last few LADWP bills.
