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How Are SDG&E Tiers Changing & Why Do You Care?

Are you an SDG&E customer who is exploring ways to save on utility, including solar? We encourage you to join other San Diego residents who have made San Diego the second city in the nation by the number of solar energy output. Despite the less solar-incentivizing changes to SDG&E tiers and billing system, solar is becoming even more cost-efficient owing to solar rebates, SDG&E and SCE future price hikes and tax credits. How are you affected by these changes?

What are tiers?

SDG&E has three tiers (or two tiers and Super User Surcharge). The basic principle of the tiered system is that the more energy you use, the more expensive it becomes per kWh. A baseline is set and your consumption is measured against that baseline. California Public Utility Commission (CPUC) and the utility determine your baseline based on certain parameters:

  • your climate zone (determined by your home’s location, whether it’s coastal, inland, mountain or desert)
  • your heating source (whether you have gas heating, gas/electric or all electric)
  • and the season (summer is June 1 through October 31 and winter is November 1 through May 31)

If you consume below your baseline you have one fixed, low charge and that’s it. If you spend more than your baseline, the monthly amount you spend determined the cost of electricity per kWh, like this:

  • Tier 1 – up to 130% of your baseline
  • Tier 2 – between 130% and 399% of your baseline
  • Super User Surcharge – over 400% of your baseline

When you power your home with solar, you lower the amount you use from the grid. Now changes are needed to protect SDG&E profits. And the changes are…

Time of Use (TOU) rates

Time of Use are periods in the day when electricity is charged at higher rates. If you use electricity during the peak periods, you’ll be charged more than if you use it off-peak. It’s like movie tickets or TV advertising.

Right now, both tier plans and time-of-use plans are available through SDG&E, but the company plans on enforcing TOU rates as mandatory in 2019 for those who haven’t already installed solar.

What does that mean for you?

It means that the sooner you go solar, the better. SDG&E will never cease to scheme new ways to secure its profits. The price of solar is going down. Compare this – in 2010, the cost of solar installation was around $10 per kW, in 2015 if was halved to around $5 and now it’s a little over $4. On the other hand, prices of grid electricity will continue their upward trend. With the current changes at SDG&E, you may not be able to save as much as you would if you had gone solar before 2017 or before 2016, but you will definitely save a lot of energy and money if you go solar as soon as possible.

If you are considering the switch to solar, reach out to Action Solar. We’d be happy to give you a free estimate and answer all your burning questions about your residential solar project. Let’s talk!