Solar Energy Net Metering Explained

Solar Energy Net Metering Explained 2017-05-01T18:26:08+00:00
SDGE Solar Net Metering

Net Energy Metering / Net Metering / NEM is an agreement between the solar energy system owner (you) and the utility company. The utility company agrees to provide credits for the extra electricity that you send to the grid — over-produced energy that you don’t use — in exchange for energy drawn from the grid at another time. Net Metering is changing throughout California, and San Diego Gas & Electric customers are entering a new era for residential and commercial solar.

The second generation of Net Metering promotes grid-connected solar installations by preserving near-retail rates for exchanging energy with the utility. As the utilities adapt to the new energy resources and shifting demand, rates are expected to climb and rate structures will change. NEM 2.0 also includes several important consumer protections, through grandfathering, which ensure that solar customers like you can preserve the value of your investment.


Net Metering continues to credit solar energy exported to the grid at retail rates, minus a few cents per kilowatt-hour for nonbypassable charges. Solar panel installation remains a solid investment financially and for the future. While other factors such as electricity rates may change, you’re guaranteed this compensation method for 20 years.

SDG&E customers need to be prepared for some significant changes through 2019. Mandatory time-of-use (TOU) schedules and a shift in the peak demand period to later in the evening are expected adjustments in how all customers are billed by the utility. Switching to a TOU rate now will allow you to claim the current on-peak time frame (11am-6pm M-F) for 5 years.

Net Metering allows you to utilize the utility as a virtual battery. When your solar panel system is producing more energy than you’re consuming, energy is exported to SDGE and you receive credit for the excess generation. Later at night or on a cloudy day, you draw energy against those credits with the utility.

Currently, going solar now gives you the best Net Metering available. Significant changes are already in the works that will affect your opportunity to save with solar. NEM 2.0 allows you to protect your compensation rate for 20 years and gives you the option to opt-in to a better rate schedule and reserve it for 5 years.


Net Metering Contract Signing Icon


All SDGE customers installing a residential or commercial solar panel system will now be required to pay a $132 application fee as part of the interconnection process. This one-time fee pays for the administrative costs incurred by SDGE’s NEM department. When looking at this fee as part of the overall value proposition of solar, it’s not even a speed bump in the savings you’ll see over the next 20-25 years. SolarTech pays this fee for all our residential customers going solar.

Non-bypassable Net Metering Charges for San Diego


Solar customers signing up under NEM 2.0 will now incur a few cents of “nonbypassable charges” on all electricity consumed from the utility. Basically, you will get full credit for energy exported to the grid, but when you import electricity (at night or on a cloudy day) you will be charged about 3¢/kWh for public purpose programs, nuclear decommissioning costs, and other unavoidable fees. Solar is still a great deal, with on-peak solar generation credits as high as 46¢/kWh.

Net Metering Time of Use for San Diego


All SDGE customers will be transitioning to a time-of-use (TOU) rate structure. The on-peak rate schedule is also planned to shift towards later in the day. Net metered customers will be required to switch to a TOU rate structure, affecting the value of solar energy exported to the grid. Going solar before this change is enacted will allow you to lock in (for 5 years) the current solar-friendly TOU schedule of 11am-6pm M-F for on-peak power prices and compensation.


If you’ve looked into solar in the past, it’s time to look again.

Request a free solar quote to see how much you can save with Solar + Net Metering. Go solar now and secure your Net Metering benefits for the next 20 years.

Lock-In Net Metering NOW. Request A Free Quote Today.
SunPower Residential Solar Panel Installation


Below is an example showing the additional cost of nonbypassable charges for a residential solar panel system with Net Metering 2.0 in San Diego. To keep it simple and understandable, the solar example is shown using the tiered rate structure and zero-down financing for a customer-owned solar energy system.

Most SDGE customers see even better savings by switching to a solar specific time-of-use rate structure (DR-SES). In this illustration, which includes additional NEM 2.0 nonbypassable charges, solar saves over 40% on electricity costs! (Click on the graphics below for a larger image).

Energy Costs Without Solar (Tiered Rate)

$314 / Month Average

SDGE Energy Bill without Solar

Energy Costs With Solar + NEM 2.0 ($0 Down Financing)

$177 / Month Average

SDGE Energy Bill with Solar and NEM 2.0


For simplicity, the example above uses the tiered rate structure to show NEM compensation. Request a consultation to see how much you can save with solar + Net Metering 2.0. Actual savings are greater when using the current DR-SES (Solar TOU) rate structure. Sample shows residential SDGE electricity costs for 1,000kWh average monthly usage offset by a 7kW solar panel system.

Electricity bill represents electricity costs during Summer months in the inland climate zone (rates as of 1/1/16). $0 down financing through San Diego Metropolitan Credit Union at 4.99% for 12 years (after 30% federal tax credit). Solar calculations include $10/month minimum electric bill and $0.03/kWh nonbypassable charges.

See How Much You Could Be Saving! Request A Free Solar Quote.