The Las Vegas Review-Journal reported Assembly Bill 405 will make it more economical for homeowners to install rooftop solar arrays on their residences.
Sandoval said the net metering bill will help make Nevada a place that will lead the nation in regard to renewable energy development.
Tesla Motors, which sells rooftop solar products, praised the bill, saying the company looks forward to bringing millions in investment dollars and thousands of jobs to the state.
In 2016, a bill was passed to lower net metering rates, which enraged solar power proponents and caused companies, such as SolarCity, to stop selling solar systems to Nevada customers.
The rooftop solar industry ground to a halt in Nevada when new, lower rates for net metering took effect in 2016. The new measure is expected to reverse that decision.