• So, you’re a San Diego homeowner and you’re looking to go solar. Congratulations on your first move towards energy independence and reducing your carbon footprint. Now, you’ve got another big decision to make: Which SDG&E Pricing Plan you will sign up for as a solar homeowner. There are several possible options offered so let’s take a look at those and see if we can determine which one is best for you, so you can get the most value out of your solar.

    A few years ago, a utility rule went into effect that required all utility customers (including solar homeowners) to move onto a pricing structure based on “time of use” or “TOU.” As the name implies, the price of electricity is determined by when you use it (instead of how much you use each month or year, for example). In San Diego, power gets more expensive in the Summertime, in late afternoon and early evening, when more people are at home, running their air conditioners (specifically M-F, 4pm-9pm, June-October). 

    The main difference between the various plans offered by SDG&E has to do with how expensive this peak period is versus how much less you pay for the rest of the dayparts. In general, in order to save more money during the “off-peak” periods, you must pay more money for the peak period 4pm-9pm. So, the key to which rate to use is deciding how flexible you are with your electricity usage throughout the day. 

    For solar homeowners, you are usually selling power back to SDGE during the period 9am-4pm, so ideally, you want to choose a plan where you can sell the most solar power when the rate is the highest vs. buying utility power when the rate is the highest.

  • SDG&E DR-SES 2021

    The default Time of Use rate structure is called “DR- SES.” This rate has the highest differential between on-peak and off-peak rates. If you decide to go with this plan, you will need to make sure that you use as little electricity as possible during peak periods (4pm-9pm, M-F) because electricity rates are almost twice as expensive during this period compared to the rest of the day! Note that this is only during Summer months, June-October. For the rest of the year, the difference in price during peak period is almost nonexistent.

  • So you can see that the cost for power is much higher in the Summer on-peak times than at any point in the year.  

    Being on this plan can decrease the overall value of your solar. That’s because, with the way the new Time of Use plans work, the solar credits you earn are priced by the time of day you are earning them. So under this plan, the credits you earn during the summer mid day would be worth $0.34/kWh. 

    When your solar is no longer producing as much, between 5:00pm and 9:00pm, and you are actually using electricity, prices are much higher, almost double at $0.609. So all those credits you earned during the day are being used at almost double the price you earned them at. So this makes it much more difficult to offset usage at those prices.

    So in order to get the most out of your solar, you may want to consider other plans, where the prices are flatter. That way, you can sell your extra solar at a higher price, and buy back power at a lower price.  

    Note: Another option would be to add a storage battery to your solar system and run your home on battery power only during peak period (4pm-9pm) rather than utility power. For more information on that option, please see the end of this article.

    Following are some different pricing plans that are flatter than the DR-SES rate structure that, if you go on, can help you get more value out of your solar.

  • So you can see here that the on-peak period in the summer is much lower than that of the DR-SES rate structure. The off-peak is also higher, so you can sell your solar during the day at a higher price. So this is a better plan DR-SES in general, as you can sell your solar for more and pay for on-peak power for less.

  • This plan is best for you if you are able to move your usage off the on-peak hours, away from 4pm to 9pm, to the lower pricing tiers. This can be as simple as doing your laundry or running your dishwasher during the day, instead of waiting from 4 to 9pm. 

    You can see that the rates of this TOU-DR plan are more similar to the DR-SES rates. So it may be better to consider TOU-DR.

  • You can see here that the on-peak times are lower than DR-SES and TOU-DR 1, but are still higher than TOU-DR. Also, under this structure, there is no super off-peak period, there is only on-peak and off-peak.

  • You can see that TOU-DR P has the flattest rates across the board. This would be the best way to structure your rates, however there is a caveat. SDG&E is giving you preferred rates in exchange for you promising to lower your usage during emergency “demand events.”

    A special “demand event” is called when there is increased congestion on the power grid that causes significant impact on the supply and demand of power; e.g., extreme heat that is causing a high demand to power A/C, or other conditions where power is in high demand. If you are on this rate and cannot lower your usage, you will be penalized with much higher rate charges for any power used during the “demand event.”

    So, the incentive here is to go on TOU-DR P to level out your electric rates. However, if you are on this plan, you will have to lower your usage during “events” – usually only 2 or 3 days per year -- or you will lose your benefit to penalty charges.

    How Adding a Battery Makes Solar Even Better

    Solar batteries have exploded in popularity in recent months. Homeowners in San Diego have been reaching out to get Tesla Powerwalls, LG batteries and others installed in record numbers, and for good reasons.

    The first reason is that SDG&E has increased its use of rolling blackouts during times of high fire danger. Since we’ve all been at home more over the last year, keeping the power on has become more important than ever, so more homeowners have been looking to install solar + battery storage to keep the lights on when these rolling blackouts are being implemented. Adding a battery to a solar system can provide that backup power, without having to use a generator.

    The second reason, and more pertinent to what we have been discussing here, is that by adding a battery to your solar system, you can charge your battery with the excess solar you produce during the day to be used during the on-peak times (4-9pm) when energy prices are high. Every kilowatt-hour of solar energy produced must be used immediately or stored – either with the utility or in your own battery. If you can use your stored solar power when the utility price is the highest ($.609 for instance), that is like making the utility to give you peak value pricing for your solar power during that period, since that is the purchase you are avoiding by relying on your battery instead.

    Luckily for San Diego homeowners, Stellar Solar is fully equipped to install both solar and battery storage. We carry a variety of solar panels and batteries from an assortment of brands, including Tesla, LGEnphase and more. So, if you’re looking to install solar and battery storage to offset high time of use rates in SDGE, contact us today.

  • About the Author

    Michael Powers


    Michael is one of the founding partners of Stellar Solar. In 2001, he helped launch The Home Depot’s national solar energy program which is now offering home solar through hundreds of stores in nearly a dozen states. He is a writer and marketing professional with over 30 years’ experience in the fields of energy, market intelligence and leadership training. He currently serves as treasurer and board member of Global Energy Network Institute (GENI), a San Diego-based non-governmental organization that advocates linking renewable energy resources around the world using electricity transmission.