Understanding Net Metering and SDG&E Rates

For a long time, California has been a solar industry leader in the U.S., with San Diego ranked second nationally in solar energy output. The city’s near-top ranking unmistakably shows that clean energy has been all the rage for the past ten years. If you live in San Diego and have already switched to solar power or are considering it, you probably have questions about net energy metering (NEM) and how it works. You may need clarification on the NEM 2.0 tariff, the successor of NEM 1.0, which was the first version of net metering.

To gain insight into your energy rates, there are two key terms you need to understand: net energy metering and time of use (TOU).

What is net energy metering?

Net energy metering in a green incentive that is a two-way connection between you and your energy provider, San Diego Gas & Electric (SDG&E). This program allows all solar users in San Diego to send the excess energy generated by their solar installation into the electrical grid.

SDG&E net energy metering, however, is not a way to earn extra cash but to achieve savings and lower your energy bill. When you start to supply SDG&E with clean electricity, your energy meter will run backward, decreasing your electricity bill.

To qualify for the SDG&E’s program, your solar system has to be properly sized to meet your electricity requirements, no larger. If you live in San Diego County or anywhere in southern Orange County, only then will you be able to enjoy the benefits of net metering.

Although the shift to NEM 2.0 instigated the beginning of a new era for SDG&E customers, solar is still a great deal. Electricity rates are expected to rise soon and this trend is unlikely to be disrupted in the future. Therefore, you can still save plenty of money and energy by switching to solar (if you haven’t already).

How is net energy metering affected by time-of-use rates?

The net energy metering program saw a few changes under NEM 2.0. Here we come to the second crucial term in the matter of net metering: time of use rate structure. California’s shift to new TOU rates has lowered the value of energy at midday (off-peak hours) and raised the rates of power in the evening (increased demand).

The on-peak window is now from 4 p.m. to 9 p.m. Given that that is when the sun is going down, this change of the peak period limits the amount of solar energy that can be produced at peak rates. Solar is produced during the day so the rates of exported solar energy are consequently lower on a time-of-use tariff. San Diegans are, however, still able to benefit from going solar so don’t delay the installation any further and lose out on incentives.

You can find more information about your energy rates and the new pricing system on the SDG&E’s website. There you can choose a new pricing plan and determine how much you can save over the current one.

Make the most out of solar in San Diego with net metering bill credits

During some months, your solar panels generate more electricity than you can use. For that excess energy flowing from your system to SDG&E’s electricity grid, you will earn bill credits on your SDG&E bill that you can use in the following months. In case your solar panels generate more power than you need, SDG&E will credit you for the additional kilowatt-hours at the wholesale compensation price.

If you want to go solar and achieve long-term savings, contact Action Solar. Based in San Diego, we specialize in solar panel design and installation and are happy to answer any questions you may have. Give us a call – today!