Quick Answer: SDG&E customers pay approximately $2.65 per watt for solar installation, with a typical 3.34 kW system costing $8,851 before incentives ($6,196 after the 30% federal tax credit). SDG&E offers NEM 2.0 net billing that credits excess solar energy at near-retail rates for 20 years, requires a $132 interconnection fee, and mandates Time of Use rate plans. The installation process takes approximately 6 weeks from contractor selection to system activation.
Key Facts for SDG&E Solar Customers (2025)
Net Billing Program Details:
System Costs and Savings:
Time of Use Rate Structure (January 2022):
Installation Timeline:
Available Incentives:
As an SDG&E customer facing some of the nation's highest electricity rates, solar panel installation offers a practical solution to reduce utility expenses while transitioning to clean energy. This comprehensive guide covers everything you need to know about costs, net billing programs, installation requirements, and maximizing your solar investment with San Diego Gas & Electric.
For most SDG&E residential customers, solar installation typically runs approximately $2.65 per installed watt. To offset a $200 monthly electric bill, you'd require a 3.34-kilowatt system, translating to roughly $8,851 in installation expenses before applying any incentives.
After accounting for the federal solar tax credit (which covers 30% of installation expenses), your out-of-pocket cost would decrease to $6,196.
*Estimated system size needed to offset monthly bill
Solar Permit Solutions provides specialized solar permit design, engineering stamps, and interconnection support services to help streamline your solar installation process with SDG&E. Our expertise can help ensure your project meets all utility and regulatory requirements efficiently.
SDG&E provides access to a net billing structure known as NEM 2.0, enabling you to earn credits for surplus solar power delivered to the electrical grid. Homeowners who initiate solar panel installation now can lock in the existing program's credit structure for a 20-year period. However, contracts signed after April 13th, 2022, fall under California's updated NEM 3.0 Net Billing framework, which provides significantly reduced compensation for exported solar electricity.
To be precise, SDG&E's offering isn't technically a net metering arrangement but rather a net billing system. Under traditional net metering, homeowners receive compensation at the complete retail electricity rate for every surplus kilowatt-hour (kWh) of solar power sent back to the grid.
What sets this apart? SDG&E, along with other California utilities, operates under NEM 2.0, a framework that compensates excess solar energy at a rate slightly below the retail electricity price. According to NREL's solar energy research, understanding these billing structures is crucial for maximizing solar investment returns.
Let's explore the key components of NEM 2.0 specifically for San Diego Gas & Electric customers.
Under NEM 2.0, solar system owners must cover non-bypassable charges on electricity they export to the grid. These charges support initiatives like energy efficiency programs and are incorporated into your electricity rate. Therefore, when you export surplus solar power to the grid, your credit reflects the electricity cost minus these non-bypassable charges.
Put simply, your credit rate will be marginally lower than SDG&E's electricity purchase rate because non-bypassable charges apply.
Solar adoption with SDG&E under NEM 2.0 mandates enrollment in a Time of Use (TOU) pricing structure. This rate plan varies electricity costs based on the hour of day. During peak demand periods, the utility implements higher rates. During low-demand windows, rates decrease.
SDG&E's standard solar Time of Use rate plan pricing as of January 2022:
Weekdays
*Summer: June 1 to October 31
**Winter: November 1 to May 31
***Excludes 10 AM to 2 PM in March and April
Weekends and Holidays
The positive aspect: SDG&E permits customers to switch between alternative Time of Use plans, allowing you to change to a different rate structure at your billing cycle's conclusion if dissatisfied with your current plan.
SDG&E requires a $132 interconnection fee for connecting residential solar installations to the electrical grid. Understanding how long solar permits take can help you budget appropriately for your project timeline.
When your solar array generates more power than your household consumes during a month, excess credits roll over to subsequent billing periods. Upon completing the 12-month billing cycle, any remaining net billing credits are forfeited.
San Diego Gas & Electric doesn't currently provide solar rebates or incentive programs.
California state programs, however, offer several solar rebates for eligible homeowners, including two distinct low-income solar incentive options. Vote Solar provides comprehensive information about state-level solar policies and incentives.
The state also administers one of the nation's premier solar battery incentive initiatives, the Self Generation Incentive Program (SGIP), potentially reducing energy storage system costs by thousands of dollars. Those interested in battery backup should explore how to build a LiFePO4 battery pack for additional cost savings.
Additionally, California residents qualify for the federal solar tax credit, covering 30% of installation expenses.
Solar installation involves more than simply mounting panels on your roof. The process requires strategic planning and administrative documentation. From contractor selection to system activation, expect approximately six weeks for the complete installation timeline.
Here's what SDG&E mandates for customer solar installations:
Solar installation begins with clarifying your objectives and understanding your energy usage patterns. Are you aiming to eliminate your electric bill entirely? What's your daily electricity consumption? Answering these questions enables you to calculate the appropriate number of solar panels for your needs. Understanding electrical fundamentals helps ensure proper system sizing.
When evaluating solar installers, prioritize companies with over five years of operational history and strong customer feedback. The California Public Utilities Commission (CPUC) provides the Solar Consumer Protection Guide to assist homeowners in selecting qualified contractors. Consider checking NABCEP's professional directory for qualified installers in your area. Your chosen installer will assist with system design and navigate the interconnection procedures.
Your contractor collaborates with you to complete the net billing application and prepare a single-line diagram detailing the system configuration for SDG&E submission. Professional permit services can expedite this process for Southern California homeowners.
Your solar contractor conducts a site assessment to verify solar suitability and submits permit applications for official installation authorization. Required permits differ by local jurisdiction. Learn more about streamlining the permitting process to avoid common delays.
Following SDG&E's approval, the utility arranges meter replacement with a bidirectional unit that monitors electricity your panels export to the grid.
Your installer proceeds with rooftop solar panel installation after submitting permitting and net billing applications. Proper racking system installation ensures structural integrity and optimal panel performance.
Upon installation completion, your contractor schedules required inspections with municipal authorities. SDG&E receives notification when inspections conclude. Understanding common design mistakes helps avoid inspection failures.
SDG&E dispatches an inspector to evaluate the finished installation. The utility simultaneously replaces your meter to ensure accurate solar generation billing. Proper grounding and bonding techniques are essential for passing inspection.
After passing SDG&E's inspection and bidirectional meter installation, you're authorized to activate your system and begin reducing electric bills.
That may appear extensive, but there's encouraging news. Most residential solar systems qualify for SDG&E's Fast Track application, eliminating certain interconnection process steps.
While specific bypassed steps remain unclear, Fast Track likely eliminates waiting periods for SDG&E inspection.
Fast Track qualification requirements:
Solar batteries represent the industry's latest advancement, though they're not universally suitable. According to the IEA's renewable energy report, battery storage adoption continues accelerating globally.
Though solar batteries can provide modest additional bill savings under time-of-use pricing by minimizing grid electricity consumption during peak-rate periods, these savings typically don't offset the $10,000+ initial battery investment.
Battery systems excel at maintaining power during grid outages, particularly relevant when California utilities implemented planned shutoffs for wildfire prevention. While batteries may not dramatically reduce your electric bill, they provide security knowing your power remains available during utility interruptions. For those considering off-grid system design, battery storage becomes essential.
Given San Diego Gas and Electric's elevated electricity pricing and abundant sunshine throughout their service area, solar adoption presents strong value for SDG&E customers. You'll reduce expenses while powering your home with clean, renewable energy, a mutually beneficial outcome.
However, timing matters significantly. The sooner you transition to solar with SDG&E, the better your long-term financial position. California's net billing future remains uncertain, with utilities advocating for substantially reduced solar compensation rates.
To optimize your solar investment, secure a solar company contract before April 13th, 2023, when California's revised Net Billing program launches and significantly diminishes solar savings potential. REN21's status report provides comprehensive data on renewable energy trends and policy changes.
Whether you're exploring residential solar systems or commercial installations, understanding SDG&E's requirements ensures a smooth installation process.
For homeowners interested in DIY approaches, our guide on building your own solar system provides valuable insights, though professional installation is recommended for grid-tied systems. You can also explore essential DIY solar books to deepen your knowledge.
Our comprehensive services streamline the SDG&E interconnection process by providing expert solar permit design, professional engineering stamps, and comprehensive interconnection assistance. Our specialized services help ensure your solar project meets all SDG&E requirements and local regulations efficiently.
Transitioning to solar energy as an SDG&E customer represents a smart financial decision given the utility's high electricity rates and Southern California's abundant sunshine. With NEM 2.0 still available for existing applicants, homeowners can lock in favorable net billing rates for 20 years, though the window for these benefits is narrowing under California's evolving solar policies.
The solar installation process with SDG&E, while involving multiple steps from permitting to final inspection, is streamlined through the Fast Track application for most residential systems. When you factor in the federal solar tax credit covering 30% of installation costs and California's SGIP battery incentives, the investment becomes even more attractive.
Success with your SDG&E solar project depends on three critical factors: choosing an experienced installer, understanding the Time of Use rate structure to maximize savings, and acting promptly to secure current net billing rates before further policy changes reduce compensation for solar exports. While the upfront investment may seem substantial, the long-term savings on electricity bills combined with environmental benefits make solar a worthwhile consideration for most SDG&E customers. The EPA's solar panel guidelines emphasize proper planning for sustainable solar adoption.
Whether you're looking to eliminate your electric bill entirely or simply reduce monthly costs, solar energy offers SDG&E customers a practical path toward energy independence and predictable electricity expenses for decades to come. Visit our blog for additional solar resources and guides.
What happens to my solar credits at the end of the year with SDG&E?
Under SDG&E's NEM 2.0 program, any excess solar credits accumulated throughout your 12-month billing cycle will expire during the annual true-up period. This means if your solar system produces more electricity than you consume over the course of a year, those unused credits don't carry over to the next billing cycle or result in cash payment. To maximize the value of your system, it's important to size it appropriately to match your annual consumption rather than significantly overproducing.
How long does it take to complete the solar installation process with SDG&E?
From the moment you select your solar installer to system activation, expect approximately six weeks for the complete installation process. This timeline includes permitting, application submissions, installation work, inspections by both local authorities and SDG&E, and bidirectional meter installation. If your system qualifies for SDG&E's Fast Track application (most residential systems under 30 kW do), the process may be expedited by bypassing certain inspection steps.
Can I switch my Time of Use rate plan after going solar with SDG&E?
Yes, SDG&E allows solar customers to change their Time of Use rate plans at the end of any billing cycle. If you find that your current TOU plan doesn't align well with your household's electricity consumption patterns or your solar production schedule, you can explore other available rate options and make a switch. This flexibility helps you optimize your savings by matching your rate structure to your actual usage patterns.
Is the $132 SDG&E interconnection fee a one-time charge?
Yes, the $132 interconnection fee is a mandatory one-time charge that SDG&E requires for connecting your residential solar system to the electrical grid. This fee covers the administrative and technical costs associated with processing your interconnection application and integrating your system into the grid infrastructure. It's a standard charge that all SDG&E solar customers must pay regardless of system size.
Will I still receive an electric bill from SDG&E after installing solar panels?
Yes, you'll continue receiving monthly electric bills from SDG&E even after going solar. However, your bills will be significantly lower or potentially reduced to just minimum charges. Your bill will reflect the net difference between the electricity your solar panels produce and send to the grid versus what you draw from the grid. During months when your system produces more than you consume, you'll accumulate credits that offset future bills. You'll also still be responsible for non-bypassable charges and any applicable grid connection fees.
Should I install solar panels now or wait for better technology and lower prices?
Given SDG&E's high electricity rates and California's changing net billing policies, waiting could cost you more in the long run. Current solar customers can lock in NEM 2.0 rates for 20 years, while those who delay face the less favorable NEM 3.0 program with significantly reduced compensation for exported solar energy. Additionally, the 30% federal solar tax credit is currently available through 2032, making now an opportune time to invest. While solar technology continues improving, the financial benefits of acting sooner (locking in better net billing rates and immediately reducing your electric bills) typically outweigh potential future technological advances or modest price decreases. For more insights, check out IEEE's renewable energy research.
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