A guide to going solar with San Diego Gas & Electric (SDG&E)

If you’re a customer of San Diego Gas & Electric, you’re paying some of the highest electricity rates in the country. If you’re sick of it (and you probably are), then it might be time for you to consider switching to solar. 

Installing solar panels helps you reduce your utility bills by generating electricity for your home to use instead of having to buy electricity from SDG&E. This means you avoid the high electric rates, with the added bonus of using clean, environmentally friendly power. 

But are the savings solar panels can provide you worth the upfront investment? Let’s take a closer look at what you need to know about going solar as a SDG&E customer. 

How much does a solar system cost in California? 

Most SDG&E homeowners will pay around $2.65 per watt of solar installed on their roof. In order to cover a $200 electric bill, you would need a 3.34 kilowatt system, which would cost about  $8,851 to install, before any incentives are considered. 

The cost would drop to $6,549 once you factor in the federal solar tax credit which covers 30% of installation costs. 

Monthly bill	System size*	System cost before tax credit	System cost after tax credit
$200	3.34 kW	$8,851	$6,196
$250	4.28 kW	$11,342	$7,939
$300	5.03 kW	$13,329	$9,330
$350	5.79 kW	$15,343	$10,740

*Estimated system size needed to cover monthly bill

Does San Diego Gas & Electric offer net metering? 

Yes, SDG&E currently offers a net billing program called NEM 2.0, which allows you to get credit for excess solar electricity you send to the grid. You can sign up to get solar panels now and receive the current program’s energy credits for 20 years. People who sign a contract after April 13th, 2022, will be transitioned to California’s new NEM 3.0 Net Billing program, which offers much lower credits for exported solar energy.

How does SDG&E’s net metering program work? 

If we’re getting technical, the program offered by SDG&E is not a net metering program per se; instead, it’s a ‘net billing program’. Basically, under a net metering program, you would be compensated at the full retail rate of electricity for each excess kilowatt-hour (kWh) of solar energy you send to the grid. 

So, what’s the difference? SDG&E, and all utilities in California, use a program structure called NEM 2.0, which credits excess solar energy sent to the grid at a rate just shy of the retail rate of electricity. We have an in-depth article that explains NEM 2.0 and how it works if you’re looking for more information.

Now, let’s get into some of the specifics about NEM 2.0 as it relates to San Diego Gas & Electric.

Non-bypassable charges 

NEM 2.0 requires solar homeowners to pay something called “non-bypassable charges” on the electricity they send to the grid. Non-bypassable charges fund things like energy efficiency programs and are rolled into your electric rate. So that means when you send excess solar energy to the grid, you will get credit for the cost of electricity, minus these non-bypassable charges. 

In other words, you’re going to be credited at a rate that is a little bit less than what you buy electricity for from SDG&E because you have to pay non-bypassable charges. 

Time of Use rates 

When you go solar with SDG&E, NEM 2.0 requires you to switch over to a Time of Use (TOU) rate plan. Under this rate plan, the utility charges you a different price for electricity, based on the time of day. When there is a higher demand for electricity, the utility charges more. When the demand is low, they charge less. 

Here’s what SDG&E charges for their default solar Time of Use rate plan as of January 2022:

Weekdays	Summer hours*	Summer price	Winter hours**	Winter price
On-peak	4 PM - 9 PM	$0.65 / kWh	4 PM - 9 PM	$0.42 / kWh
Off-peak	6 AM - 4 PM; 9 PM - 12 AM	$0.39 / kWh	6 AM - 4 PM**; 9 PM - 12 AM	$0.37 / kWh
Super off-peak	12 AM - 6 AM	$0.31 / kWh	12 AM - 6 AM; 10 AM - 2 PM in March and April	$0.31/ kWh

*Summer: June 1 - October 31

**Winter: November 1 - May 31

*** Excludes 10 AM - 2 PM in March and April

Weekdays and holidays	Summer hours	Summer price	Winter hours	Winter price
On-peak	4 PM - 9 PM	$0.65 / kWh	4 PM - 9 PM	$0.32 / kWh
Off-peak	6 AM - 4 PM; 9 PM - 12 AM	$0.39 / kWh	2 PM - 4PM; 9 PM - 12 AM	$0.37 / kWh
Super off-peak	12 AM - 2 PM	$0.31 / kWh	12 AM - 2 PM	$0.31 / kWh

The good news is, SDG&E allows you to choose other Time of Use rates, so if you are not satisfied with your plan, you can select another one at the end of your billing cycle. 

Interconnection fee 

SDG&E charges a mandatory $132 interconnection fee in order for a residential solar system to be connected to the grid. 

Annual True-Up 

When your solar panel system produces more electricity than your home uses in a month, those credits can be applied to your next month's bill. At the end of the 12-month billing cycle, any unused net metering credits will expire. 

Does SDG&E have any solar rebates or incentives? 

No, San Diego Gas & Electric does not offer any solar rebates or incentives. 

The state of California, on the other hand, does offer a handful of solar rebates for homeowners who qualify, including two different low-income solar rebates.

California also has one of the leading solar battery incentive programs in the country, called the Self Generation Incentive Program (SGIP), which has the potential to reduce energy storage installation costs by thousands. 

And of course, Californians qualify for the federal solar tax credit, which covers 30% of solar installation costs. 

Steps to going solar with SDG&E 

Installing solar takes more than just screwing panels into your roof. It takes thoughtful planning and a bit of paperwork. Overall, the installation process will take around six weeks from the time you choose your installer to the time the system is turned on. 

Let’s take a look at what SDG&E requires for their customers to go solar. 

1. Identifying what size solar system you need 

In order to install solar, you need to figure out what you’re looking to get out of your system, as well your energy consumption. Do you want to cover your entire electric bill? How much electricity do you use on a daily basis? Once you find the answers to these questions, you can figure out how many solar panels you need to meet your goals. 

2. Finding a solar installation company 

When looking for a solar installer, you should look for a company that has been in business for more than five years and has positive customer reviews. The California Public Utilities Commission (CPUC) has put together the Solar Consumer Protection Guide to help homeowners choose the right contractor. Your solar installer will help you design your system, as well as guide you through the interconnection process.

3. Submit net metering interconnection application to SDG&E 

Your contractor will work with you to fill out the net metering application and a one line diagram outlining the system’s design to SDG&E. 

4. Permitting 

Your solar installer will visit your home to make sure it's right for solar and will send out permitting applications so you can officially install your system. The permits required vary by municipality. 

5. Application approval 

Upon SDG&E’s approval, the utility will schedule a date to replace your electric meter with a bidirectional meter that allows SDG&E to track how much electricity your panels are sending to the grid. 

6. Installation 

Your installer can begin installing solar panels on your roof once your permitting and net metering application have been submitted. 

7. City/county inspection 

Once the installation is complete, your contractor will coordinate with city and county officials for the proper inspections. When inspections are completed, SDG&E will be notified. 

8. SDG&E inspection and bi-directional meter installation 

SDG&E will send out their own inspector to take a look at the completed installation. The utility will also replace your electric meter so you can be billed properly for your solar generation. 

9. Permission to operate 

If you pass SDG&E’s inspection and your bidirectional meter is installed, you’re ready to turn on your system and start saving on your electric bills!

SDG&E’s Fast Track application 

We know that looks like a lot of steps. But, there’s good news! Most residential solar panel systems will qualify for SDG&E’s Fast Track application, which lets you skip some of the steps we listed in the interconnection process. 

The steps that are bypassed with Fast Track applications are unclear, but it likely means you won’t have to wait around for the SDG&E inspection. 

In order to get on the Fast Track:

• Your system must be less than 30 kW in size (which most residential solar systems are)

• Your application must be submitted five days before any city or county inspections

• There are no issues accessing your property at any time, any day of the week

Should SDG&E customers consider installing a solar battery? 

Solar batteries are the hot new thing in the solar industry, but they aren’t right for everyone. 

While it is true that you can use a solar battery to help save a little extra money on your electric bill with Time of Use by reducing how much electricity you take from the grid when electricity is most expensive, these savings generally won’t make up for the $10,000+ upfront cost of a battery. 

Where batteries really come in handy is when it comes to keeping the lights on when the grid goes down, like when the utilities across California started instituting planned power shut offs to prevent wildfires. So, while the battery might not give you huge additional savings on your electric bill, it can give you peace of mind that when the utility goes down, your power will stay on. 

Is going solar with SDG&E worth it?

Considering the fact that San Diego Gas and Electric has such high prices for electricity and that their service territory gets a lot of sunlight, we definitely think it's worth it to go solar with SDG&E. You’ll save money, plus you’ll get to use clean renewable energy to power your home. It’s a win-win! 

However, we do want to warn you - the sooner you go solar with SDG&E, the better. Right now in California, there is a big fat question mark over the future of net metering and utilities are fighting to greatly reduce how much homeowners get compensated for solar power. 

If you want to maximize your solar savings, you’ll need to have a contract with a solar company signed by April 13th, 2023, after which California’s new Net Billing program will take effect and greatly reduce solar savings.

The best way to start your switch to solar is by using our solar panel savings calculator. You can find out how much you can save by going solar with SDG&E, see what size system you need, and get an estimate of how much energy your solar panels will produce.