How Solar Works in San Diego

Things have Changed

Your system is supposed to save you money by potentially ELIMINATING your kilowatt hour charges from your utility company. You may choose a less expensive grid tied solar system that sells back to the grid during off peak market rates, or you can simply pay a little more for grid independence. It may not be as much as you think.

Modes of Operation

 We have to understand that with solar there are MODES of operation. Most systems are not flexible enough to accommodate rates changes and can only operate in one mode or two. This equipment still costs thousands and replacing equipment because things got changed on you is an expensive mistake.

Understanding the Language

We hope that the information below will help you understand the differences between solar system designs and why it matters.

A few years ago, you simply canceled out any charges you consumed in the evening by selling your solar electricity back to the grid. It was a good deal! First adopters are still receiving the benefits. This is often referred to as  “running the meter backwards”. The technical term is Net Energy Metering.  This is no longer the deal it once use to be.

To understand how things work, there are some rates structures and terms to understand.



Grid Tied
Time of Use (TOU)

Grid Tied

GRID TIED is a term used in the industry that implies that a solar system is tied or connected to the grid. A solar system that exports or sells electricity to  the grid is more accurately a Mode of Operation. The only MODE available by most solar system designs.   This is the most common and popular mode of operation but changes in billing structures have diminish the value received when you operate in this mode of operation. It is important to understand that a grid connected solar system does not indicate that it must sell to the grid or export to the grid. Did you know that with approved equipment you do not have to sell back to the grid and produce your own electricity 24 hours a day?

Time Of Use (TOU)

TOU is Time of Use. Time of use is a rate structure that determines the retail price of electricity during different times of the 24 hour period. Currently the most expensive or premium electricity is between 4PM and 9PM. Also identified as “ON PEAK”.


NEM stands for the Net Energy Metering agreement between you and your utility company. This agreement is for the purpose of selling back to the grid for credit against the electric charges you incur during non export hours. The total accumulation of solar credit at the retail price minus electricity usage at the retail price is the net amount you owe or are credited once per year.  Any extra is credited to you at what they call whole sale. $0.01 to $0.04 cents per kilowatt hour.  Retails is $0.21 to $0.57 per kilowatt. There is really no advantage in buy excess unless… you use it to charge your own battery or perhaps plan on using more in the future. The costs just don’t pan out operating in this mode and spending a large amount of money on excessive equipment. Currently there is a proposal to increase 400% the minimum annual charge for the privilege of exporting your solar to the grid. That equates about $470 per year.

off grid (NEM)

Off Grid means just that. Your solar system is disconnected from the electric grid. Normally these are systems located outside of town or a cabin and there are not utilities located near the property. However, what most people don’t know is that you can be off grid while you are still connected to the grid. With the right equipment you can produce your own power 24 hours a day and simply have the grid incase you have equipment failure. You do not have to sell or export to the grid. With the right approved equipment this is possible! 

Electric Rates for Solar utility clients only

SDG&E RATE EFFECTIVE FEBRUARY 2020 TIME OF USE (TOU) (Inside City of San Diego City limit is a higher amount)
Electric rate if you install solar and agree to NEM agreement.
  OFF PEAK (solar sell price) ON PEAK usage price
Winter price per KWH: (Your lowest solar production of the year) $0.26 $.027
Summer price per KWH: (Your highest solar production of the year) $0.31  SELL  LOW $0.55 BUY HIGH
Winter price per KWH: $0.35 $0.36
Summer price per KWH: $0.45 $0.36

Buy high Sell Low!

Historically there is a 75% to 150% difference between the electricity that you sell in the day and the electricity you buy back at night.  Selling your solar power to the grid?  Under the NEM agreement you agree to buy electricity back from your utility company for a higher price than what you sold it to them! Yes. Yes that is correct. You sell them electricity, then you can buy it back later for a higher price.  You do not control the price. The higher price historically has been increasing 10% per year. Yes 10% per year.

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