Minimum Bill Charge for Solar Customers Explained

If you are an SDG&E customer and you’re considering going solar, or you’re already powering your property with solar energy, you must be wondering how the recent changes to minimum bill charges will affect you.

In fact, a great number of solar customers don’t even understand the concept of minimum bill charge, let alone understand the adjustments and how the charge influences the price of monthly electric delivery. Action Solar will provide answers to some of the frequently asked questions about the charge, with special regards to SDG&E renewable energy customers, that is – solar customers.

What is the Minimum Bill Charge?

The Minimum Bill Charge is a residential rate which ensures that SDG&E customers have to pay a portion of the costs of the electrical service, even if they use just some or no electricity at all. With more and more homeowners going solar and off the grid, SDG&E had to find a way to protect its profits.

Can we expect another adjustment to minimum bill?

The minimum bill has been part of SDG&E’s rates for a while, but there has been a number of adjustments due to the ever increasing number of solar customers. The first adjustment took place in 2015 when California Public Utilities Commission (CPUC) increased the monthly minimum bill from $3.60 to $5 for CARE customers, and from $4.50 to $10 for those customers not on CARE.

The next adjustment is expected to take place some time in 2018.

What did the 2015 adjustment mean for solar customers?

The adjustment in 2015 meant that residential customers’ monthly electricity bill increased only if the actual usage of electricity was so small that a minimum bill had to apply.

For customers not on CARE, it means that they now had to pay $10 a month, instead of $4.50, which would amount to $120 a year. This was a $66 increase on a yearly basis. However, the amount of energy that was returned to the grid is also accounted for, so the solar customer is compensated by SDG&E if they have produced more kWhs than they purchased from the utility. Other charges made throughout the year are also deducted so credits may apply at the end-of-year “True-up”.

How do minimum bill adjustments affect residential solar installation?

As we’ve seen in recent changes to minimum bill charges, as well as the tendency for grid electricity cost to go up, you’d better go solar sooner rather than later. What’s more, as the cost of grid electricity is on the rise, the cost of solar installation has never been lower, and continues to go down.

There are numerous rebates and other incentives for going solar, and San Diego is likely to retain its status as the second city in the U.S. by the amount of solar energy output, or even move up the list.

In other words, solar is the way to go, as the U.S. is on the steady path towards greater eco-consciousness and energy efficiency. By managing their profits, SDG&E will also be able to continue to provide grid energy for when the sun isn’t shining. For home owners, it really is a small amount to pay for a back-up plan.

Grid energy is also important if there’s an issue with your solar panel. If installed improperly, your solar panel will not be as efficient as anticipated (and paid for), so it’s imperative that you team up with a reliable solar company. Action Solar is at the forefront of solar installation and related services – reach out to us today and let’s find the best solar solution for your home!