SDG&E Net Metering & Time-of-Use Structure Deadlines

Deadlines of SDG&E Net Metering Customers to Time-of-Use Rates

Over the next couple years, SDG&E Net Metering customers will see significant changes as everyone is transitioned to a Time-of-Use (TOU) rate structure. We will go over the timeline in which SDG&E has proposed these changes, as well as the various methods of grandfathering into these new structures. Before we hop into these topics, let us explain the basics.

Table of Contents

  1. 2017 – Implementation of Super User Surcharge
  2. 2017 – Deadline for NEM 1.0 customers to switch rate structures
  3. 2017 – First deadline for NEM-ST customers
  4. 2018 – Second deadline for Permission to Operate under NEM-ST
  5. 2018 – Remainder of Net Metering ST customers
  6. 2019 – All SDG&E customers will shift to Time-of-Use rates
  7. 2019 – California Public Utilities Commission will revisit Net Metering
  8. 2019 – End of the 30% Solar Investment Tax Credit, step down begins

First off, what is SDG&E Net Metering?

Net Metering, also known as NEM, is a billing agreement that enables a solar energy system owner to be credited by their utility for the power that their system overproduces and sends to the grid. In other words, if your system is producing more than your house is consuming, then the excess power will be pushed to the grid for later use by your home when your energy consumption exceeds your production — in most cases, for a literal rainy day or at night. For a visual explanation, check out our illustration below:

Illustration of How SDG&E Net Metering Works

Secondly, what is Time-of-Use?

Time-of-Use (TOU) periods are spans throughout the day in which the utility charges higher rates during on-peak demand and lower rates during off-peak demand. Currently, the on-peak window is from 11AM-6PM, and is proposed to change to 4PM-9PM by December 2017 in SDG&E territory.

SDG&E Time-of-Use Chart

What changes will SDG&E make over the next couple years?

Below is a timeline of the changes to come by the end of 2019. Keep in mind, these changes are what’s purposed by SDG&E, and can differ pending final approval by the California Public Utilities Commission (CPUC).

Implementation of SDG&E’s Super User Electric Surcharge

Who’s affected?Customers who use more than 400% of baseline energy (>1,200 kWh/month)
Purposed start date??/??/2017

Nikola Tesla Experimenting with Electricity

Though we do not know the exact date, SDG&E has made it clear that they will be phasing in the Super User Electric (SUE) surcharge sometime in 2017. The SUE surcharge penalizes customers who use more than 400% of baseline in their climate zone — usage of over 1,200 kWh per month. Pricing for “Super Users” is expected to be more than double Tier 1 rates.

“Super User” electric surcharge

2017: The final decision established a “super user” electric surcharge (SUE) intended to penalize excessive energy use. This surcharge will be phased in starting in 2017 and only apply to customers whose usage is above 400 percent of baseline – meaning double the average customer’s usage in their climate zone. As detailed in the timeline above, the SUE will increase over time, ultimately reaching a rate at more than double Tier 1. Approximately 2 percent of SDG&E’s customers will fall into this category.

Deadline for NEM 1.0 customers to switch rate structures

Who’s affected?NEM 1.0 customers only
Last day to switch over07/28/2017 (Optional)

Vintage clock on a wood table

For SDG&E Net Metering 1.0 customers that are not already being billed under a TOU rate structure, in order to be eligible for the 5-year TOU Grandfathering, you must submit a request with SDG&E no later than 07/28/2017. If you are a NEM 1.0 customer who is already being billed under a TOU rate and have been receiving this service for less than five years from your original Permission to Operate was issued, then you will automatically receive TOU Grandfathering for a period of up to 5 years, unless you choose to opt-out.

First deadline for Permission to Operate under NEM-ST

Who’s affected?NEM-ST customers activated before 12/01/2017

Empty room with multiple doors

Customers who receive Permission to Operate before the implementation of Phase 2 of SDG&E’s 2016 GRC TOU rates, which is expected to happen on 12/01/2017, will have the ability to:

  1. Take service under a Time-of-Use rate that uses the new TOU periods (purposed for 4PM-9PM).
  2. Take service under and TOU rate that uses existing TOU periods in effect at the time Permission to Operate was issued (currently Noon-6PM).
  3. Take service under existing tiered rates in effect at the time Permission to Operate was issued (current 2-tier structure).

Please note, one of the these 3 options will drop off if you receive PTO after 12/01/2017.

Second deadline for Permission to Operate under NEM-ST

Who’s affected?NEM-ST customers activated after 12/01/2017 and before 03/30/2018

People standing in a line

Customers who receive Permission to Operate on or before 03/30/2018, will have the ability to:

  1. Take service under a Time-of-Use rate that uses the new TOU periods (purposed for 4PM-9PM).
  2. Take service under tiered rates in effect at the time Permission to Operate was issued (current 2-tier structure).

Remainder of Net Metering ST customers

Who’s affected?NEM-ST customers activated after 03/30/2018

Time expired on parking meter

For the remaining customers who receive Permission to Operate after 03/30/2018, you will be required to be billed under an applicable TOU rate structure and will not have the ability to opt-out. This means you will be locked into whatever TOU structure is present, without the ability to request services under a tiered rate structure.

All SDG&E customers will shift to Time-of-Use rates

Who’s affected?All SDG&E customers
Date of transition??/??/2019

Shift key on a black laptop

Though there is not currently a date set for this transition, we knew that 2019 will be the year that SDG&E shifts all customers to some form of TOU rates. The only customers not affected by this shift will be those who are grandfathered in with legacy time periods or tiered rates.

California Public Utilities Commission will revisit Net Metering

Who’s affected?All customers with solar energy systems
Date of revisit??/??/2019

Electricity utility meter on a house

The CPUC has already decided that the NEM-ST plan is temporary. We know that the discussion on Net Metering will be revisited sometime in 2019. While we don’t know what will follow once revisited, we can safely assume it will be less attractive than the current plan.

End of the 30% Solar Investment Tax Credit, step down begins

Who’s affected?All future solar customers
Last date for 30% Tax Credit12/31/2019

Different sized stacks of coins

For everyone wanting to go solar in the next couple years, in order to get the full 30% Investment Tax Credit, solar PV systems must be installed and activated by 12/31/2019. Currently, the tax credit is set to step down over several years; 26% for systems installed and activated in 2020, 22% for systems installed and activated in 2021, then in 2022 the tax credit will no longer be available for residential solar energy customers.