How Much Does Sdg&E Pay For Solar Power In San Diego?

With ever-rising electricity rates in San Diego, many homeowners are looking to solar power as a way to gain energy independence and reduce their utility bills. One big question is: how much does San Diego Gas & Electric (SDG&E) pay you for the extra solar power your system generates?

If you’re short on time, here’s a quick answer: SDG&E currently pays solar customers $0.248 per kWh through net metering for systems up to 1 MW in size. This rate consists of retail credit for energy exported to the grid and other credits and charges.

SDG&E calculates compensation monthly based on net excess generation.

Overview of SDG&E’s Solar Power Compensation

SDG&E, also known as San Diego Gas & Electric, is a utility company that serves San Diego and southern Orange County. As part of their commitment to renewable energy, SDG&E offers compensation for solar power generated by residential and commercial customers.

This compensation is designed to encourage the adoption of solar energy and help reduce reliance on traditional sources of electricity.

Net Metering Overview

One of the ways SDG&E compensates solar power producers is through net metering. Net metering is a billing arrangement that allows customers to receive credit for excess energy their solar panels generate and send back to the grid.

When the solar panels produce more electricity than the customer needs, the excess energy is fed back into the grid, and the customer receives a credit on their electricity bill. This credit can then be used to offset the cost of electricity consumed during times when the solar panels are not producing enough energy.

Retail Credit Rate

The credit rate that SDG&E assigns to the excess energy produced by solar panels is called the retail credit rate. The retail credit rate is determined by the California Public Utilities Commission and is based on the current market value of electricity.

This rate can vary and is subject to change over time. It is important to note that the retail credit rate is typically lower than the rate at which SDG&E sells electricity to its customers. However, the ability to offset the cost of electricity consumed during times when the solar panels are not producing enough energy can still result in significant savings for solar power producers.

Other Credits and Charges

In addition to net metering, SDG&E also offers other credits and charges for solar power producers. For example, they may provide incentives for installing solar panels, such as rebates or grants. These incentives can help offset the upfront costs associated with installing solar panels and make solar energy more affordable for customers.

SDG&E may also charge fees for interconnecting solar systems to the grid or for additional metering equipment that may be required.

It’s important for solar power producers to understand the various compensation mechanisms offered by SDG&E and how they can benefit from them. By taking advantage of net metering, the retail credit rate, and other credits and charges, solar power producers in San Diego can not only contribute to a cleaner and more sustainable future but also save money on their electricity bills.

SDG&E’s Net Metering Program

SDG&E, or San Diego Gas & Electric, offers a net metering program to its customers who have installed solar power systems. Net metering is a billing arrangement that allows solar power system owners to receive credit for the excess electricity they generate and send back to the grid.

How Net Metering Works

Under SDG&E’s net metering program, when a solar power system produces more electricity than the customer uses, the excess energy is sent back to the grid. This excess energy is measured by a bidirectional meter that can track both the energy consumed from the grid and the energy sent back to the grid.

The customer receives credits for the excess energy, which can be used to offset future electricity bills. This means that during times when the solar system is not producing enough electricity, the customer can use the credits to cover their energy consumption from the grid without incurring additional costs.

Who Qualifies for Net Metering

To qualify for SDG&E’s net metering program, customers must meet certain criteria. They must have a solar power system that is connected to the grid and meets all safety and technical requirements. The system must be located on the customer’s property, and its capacity should not exceed the customer’s historical electricity consumption.

Additionally, customers must be on a residential or small commercial rate schedule.

Net Surplus Compensation

Under SDG&E’s net metering program, customers who generate more electricity than they consume over a billing period are eligible for net surplus compensation. This compensation is provided in the form of a monetary credit applied to the customer’s account.

The value of the credit is based on the market rate for electricity at the time of surplus generation. SDG&E’s website provides more detailed information on the calculation and application of net surplus compensation.

It’s important to note that the specific details and policies of SDG&E’s net metering program may be subject to change. For the most up-to-date and accurate information, it is recommended to visit SDG&E’s official website at

Additional Credits and Charges

Renewable Energy Credits

One of the additional credits that SDG&E offers for solar power in San Diego is the Renewable Energy Credit (REC) program. RECs are a way to support and promote the production of renewable energy. When you generate solar power, you earn RECs, which can then be sold to SDG&E or other utilities.

These credits represent the environmental benefits of producing clean energy and can be a significant source of income for solar power owners.

SDG&E’s REC program allows homeowners and businesses to earn credits for the solar power they generate. These credits can be used to offset their electricity bills or sold to SDG&E. The price of RECs varies depending on market conditions, but they can provide an additional financial benefit for solar power owners in San Diego.

For more information on SDG&E’s REC program, you can visit their website here.

Non-bypassable Charges

In addition to the credits, SDG&E also applies non-bypassable charges for solar power in San Diego. These charges are intended to cover various costs associated with maintaining the electrical grid and providing reliable electricity to all customers.

Non-bypassable charges include items such as the Public Purpose Program charge, the Nuclear Decommissioning charge, and the Competition Transition Charge. These charges are typically a fixed amount per kilowatt-hour of electricity consumed and are applicable to all customers, including solar power owners.

It’s important to note that even though solar power owners generate their own electricity, they still rely on the electrical grid for backup power and to sell any excess electricity they produce. Therefore, they are subject to these non-bypassable charges to help cover the costs of operating and maintaining the grid.

For a detailed breakdown of the non-bypassable charges applicable to solar power owners in San Diego, you can refer to SDG&E’s tariff schedule available on their website here.

Factors That Impact SDG&E Solar Compensation

When it comes to solar power in San Diego, there are several factors that can impact the compensation provided by SDG&E. These factors include time-of-use rates, demand charges, and grid usage charges.

Time-of-Use Rates

SDG&E uses time-of-use rates to determine how much they pay for solar power. This means that the amount paid for solar energy can vary depending on the time of day it is generated. Typically, SDG&E pays more for electricity generated during peak demand hours, such as evenings when people are using more electricity.

On the other hand, they pay less for electricity generated during off-peak hours when demand is lower.

It is important for solar power system owners to understand these time-of-use rates and adjust their energy usage accordingly. By shifting energy-intensive activities, such as running appliances or charging electric vehicles, to off-peak hours, solar system owners can maximize their compensation from SDG&E.

Demand Charges

In addition to time-of-use rates, SDG&E also considers demand charges when calculating solar compensation. Demand charges are based on the highest amount of electricity used during a specific period, typically measured in kilowatts (kW).

These charges are separate from the energy charges and are designed to cover the cost of providing electricity during periods of high demand.

For solar system owners, this means that the compensation they receive from SDG&E may be influenced by their peak electricity usage. The higher the demand for electricity from the grid, the higher the demand charges and potentially lower the overall compensation for solar power.

Grid Usage Charges

Another factor that impacts SDG&E solar compensation is the grid usage charges. These charges are associated with the costs of maintaining and operating the electrical grid infrastructure. Solar system owners who are connected to the grid pay these charges to SDG&E for using the grid as a backup source of electricity.

It’s important to note that the grid usage charges are separate from the compensation received for solar power generation. Solar system owners are compensated for the excess electricity they generate and send back to the grid, but they still need to pay these grid usage charges for their grid connection.

Understanding these factors is crucial for solar system owners in San Diego who want to maximize their compensation from SDG&E. By optimizing their energy usage, managing peak demand, and considering the grid usage charges, solar system owners can make the most of their solar investment and contribute to a more sustainable future.

Other Solar Incentives in California

In addition to the payments made by SDG&E for solar power in San Diego, there are several other incentives available to encourage the adoption of solar energy in California. These incentives can help homeowners and businesses offset the cost of installing solar panels and make clean energy more accessible to all.

Federal Tax Credit

One of the most significant incentives available to solar energy users in California is the federal solar investment tax credit (ITC). This tax credit allows homeowners and businesses to deduct a portion of the cost of their solar system from their federal taxes.

As of 2021, the ITC allows for a deduction of 26% of the cost of the system. However, it’s important to note that the ITC is set to decrease to 22% in 2023 and will expire for residential systems after 2023.

Therefore, taking advantage of this incentive sooner rather than later can lead to greater savings.

Property Tax Exclusion

Another incentive available in California is the property tax exclusion for solar energy systems. This means that the value added to a property by a solar system is not subject to property tax assessments.

Homeowners can enjoy the benefits of solar power without seeing an increase in their property taxes. It’s important to check with your local county assessor’s office for specific eligibility requirements and guidelines.

SGIP Rebates

The Self-Generation Incentive Program (SGIP) offers rebates to customers who install qualifying energy storage systems. These systems can be used in conjunction with solar panels to store excess energy for use during times when the sun is not shining.

The SGIP rebates help offset the cost of installing energy storage systems, making them more affordable for homeowners and businesses. The program is administered by the California Public Utilities Commission (CPUC), and eligibility requirements can be found on their website.


In summary, SDG&E currently pays solar customers an average of $0.248 per kWh for excess power sent back to the grid under net metering rules. This rate is made up of a retail credit at your normal electricity rate, plus adjustments for renewable energy credits and non-bypassable charges.

While compensation rates are still favorable, changes are coming in California that will impact the value of grid-tied solar in the future. Understanding SDG&E’s current solar payback policies, as well as other incentives, can help you make the most informed solar investment for your home.

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