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2021 San Diego Gas & Electric (SDG&E) Solar Net Energy Metering (NEM) 2.0

Updated: Jan 29, 2021

SDG&E NEM 2.0 guide thaw net energy metering works in San Diego
San Diego Gas & Electric Net Energy Metering 2.0


San Diego Gas & Electric's utilizes the Net Energy Metering (NEM for short) model for customers who install solar. San Diego Gas & Electric's NEM program provides homeowners with credit for the excess solar energy that they send into the SDG&E grid. When the solar system is not producing enough electricity to cover the home's electrical usage, the credits can cover the SDG&E rates.

Like the two other investor-owned utilities in California, Pacific Gas & Electric (PG&E) and Southern California Edison (SCE), SDG&E is now under NEM 2.0. When a homeowner's solar system is sized correctly, SDG&E customers under NEM 2.0 like those under NEM 1.0 can save tens of thousands of dollars of the solar system's life.

Where does SDG&E offer net metering?

San Diego Gas & Electric offers Net metering to all of its customers. SDG&E covers all of San Diego County and parts of Southern Orange County.

What are the SDG&E's electricity rates, and how do credits work under net metering?

Like many other utilities, San Diego Gas & Electric has different factors that determine the individual rates. Even if the rates vary somewhat, the Net metering structure is the same for all homeowners: for each kilowatt-hour (kWh) that a customer sends to the grid, they will receive a bill credit equal to the value of that kWh. SDG&E has some of the highest rates in the nation, and before going solar, a customer can expect to pay, $0.22, and $0.57 per kWh, depending on when in the year and the day the kWH is utilized.

If you are looking for the most up to date breakdown of the NEM rates, SG&E website has information for the current residential customers.

The SDG&E Net Metering 2.0 is a bit different compared to Net Metering 1.0

SDG&E NEM 2.0 details are as follows:

  1. Credits for exported electricity- Full retail rate

  2. Rate structure- All NEM 2.0 customers are on Time of Use rate structures

  3. Non-bypassable charges (NBCs)- Customer pays NBCs on all electricity that they utilize during a billing period

  4. System sizing- System cannot be sized greater than a homes electrical needs, but a system can be as large as needed

  5. Interconnection fee- A onetime payment of $132 for residential customers

SDG&E has additional Net Metering context and information on its website

How does SDG&E net metering program compare to others in California?

Like the other two investor-owned utilities in California Pacific Gas & Electric and Southern California Edison, SDG&E's net metering program is structured based on the California Public Utilities Commission (CPUC). Because of the similarities in structure, the NEM program's economics are very similar across all three utilities.

Other utilities in California are still under NEM policies that do not require customers to transition over to Time-of-use (TOU) rates (Los Angeles Department of Water & Power, for example). While most California utilizes are on NEM 1.0 or 2.0, some smaller utilities do not offer Net energy metering programs.

Solar customers in SDG&E do see some of the highest savings rates by switching to solar from anyone in California. Switching over to solar is so beneficial because SDG&E electricity rates are among the highest in California. The TOU requirements of NEM 2.0 do mean that system design is especially important to ensure maximum production during the times of day when the solar credits are highest.

If a system produces extra electricity, what will SDG&E do with the net metering bill credits?

Because of the differing sun exposure from month to month (usually more sun exposure during the summer months and less during the winter), a solar system will produce a different amount of electricity every month. Sometimes this will mean that a solar system has produced extra electricity in a month. In others, it will produce less.

During the months when a system produces extra energy, SDG&E will provide a homeowner with credits that can be used in future months. If a PV system is sized correctly, it should produce enough to have no extra or very few extra credits at the end of twelve months.

If a solar system has produced more electricity at the end of twelve months than it has utilized, the home will be provided with credit for the extra kilowatt-hours at the wholesale compensation price.

SDG&E calculates the wholesale compensation price by taking the average per-kilowatt hour value for each month based on the average market price for electricity. At the end of twelve months, you will receive a bill credit for any extra electricity at the average rate that SDG&E has calculated for that month.

What is the San Diego Gas & Electric interconnection fee for?

Before a solar system is activated, an interconnection request needs to be submitted to SDG&E. The interconnection requests ensure that SDG&E knows about the solar at the home and safely connects to the utility grid.

The interconnection request fee in SDG&E under NEM 2.0 is $132.

If you are interested in learning more about NEM 2.0 in SDG&E and how you can save money by switching to solar, set up a free consultation today.

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