You are not on NEM 3.0, and that matters more than anything else
The California Net Billing Tariff took effect for new applications on 15 April 2023 under CPUC decision D.22-12-056, and it compensates exports using Avoided Cost Calculator values, which are usually well below what you pay to import.
It does not apply here. The CPUC page carrying those rules states that its content applies in the territories of the large electric investor-owned utilities, naming PG&E, SCE and SDG&E. Publicly owned utilities are outside it and set their own policies.
MID is one of those publicly owned utilities, and it currently offers NEM 2.0 only. So the export collapse that reshaped solar economics in most of the state did not happen to Modesto customers, and modelling built on it is modelling the wrong utility.
This cuts both ways when you shop. A quote produced from a generic California template may understate your return, and an installer who works mostly in PG&E territory nearby may carry NEM 3.0 assumptions across without noticing. Ask directly which tariff the projection assumes.
What MID actually pays, and how it is measured
Excess energy produced in a month is credited to that month bill at the NEM 2.0 credit rate, which MID publishes as 7.6 cents per kWh. That is a stated rate rather than a formula that moves with market conditions, which makes it unusually easy to model.
Measurement is not monthly, though, and the distinction matters. MID bills the NEM 2.0 programme in real time, tracking usage and generation hourly for residential customers and every 15 minutes for commercial ones.
Hourly netting means generation only offsets consumption that happens in the same hour. Power produced at midday does not cancel out consumption at 8pm; the midday surplus becomes an export credited at 7.6 cents, and the evening consumption is bought at your retail rate.
So the gap between your retail rate and 7.6 cents is the real driver of value, and shifting consumption into daylight hours is worth money. Ask any installer to model your bill hour by hour rather than on annual totals, because annual totals hide exactly this effect.
The sizing cap and the fees that are easy to miss
MID limits a system to 115 percent of the current annual demonstrated load of the meter where the solar is installed, based on the CSI calculator. That is a real constraint on oversizing, and it is measured against the meter history rather than your intentions.
It matters if you are planning ahead for an electric vehicle, a heat pump or an addition, because the load that has not happened yet does not count toward the cap. Raise that with your installer before the design is fixed rather than after.
There is an interconnection fee, and it is not trivial: MID charges $900 for systems under 100 kW and $1,800 for 100 kW or greater. Confirm whether a quoted price includes it, because it is the kind of item that appears late.
Applications are accepted by hard copy only, not electronically, and the account must be active and in the applicant name. That is an administrative detail rather than an economic one, but it affects timelines, so ask who is submitting the paperwork and when.
The federal credit that ended, and what survives
The 30 percent Residential Clean Energy Credit under Section 25D expired for property placed in service after 31 December 2025. A cash or loan purchase completed now does not receive it, and a quote that still applies it overstates your return by a large margin.
This is the single most common error in current California quotes, because a great deal of published material and calculator logic was written while the credit existed and has not been revised.
Section 48E survives at 30 percent for third-party owners, so a lease or power purchase agreement provider may claim it and reflect some of that value in the rate offered to you. What they claim and how much reaches you are separate questions worth asking separately.
California property tax treatment is unaffected. The Active Solar Energy System Exclusion keeps the added value of a qualifying system out of your assessment, and it is a state provision rather than anything MID administers. Confirm the current position with a tax advisor rather than with sales material.