The Best Rate Structure For Solar

While the adjustments that went into effect this month have come as a shock to some SDGE customers, this is just the beginning. SDGE’s rate structure transition plan has several HUGE milestones coming in the next few years. This transition to two tiers is only temporary, as SDGE will be adding a “Super User Surcharge” in 2017. Once enacted, this will apply to residential customers using more than 400% of the baseline amount (or about 1,200/kWh per month). Pricing for Super Users will be “more than double” Tier 1 pricing, according to SDGE. As Tier 1 pricing creeps up and Tier 3 pricing trickles downward (with the goal of a 25% differential between the two tiers), this Super User Surcharge is expected to cost $0.40-$0.50/kWh, again creating a significant gap in cost between baseline and top tier energy. Although this strategy seems to fly in the face of the tier “flattening” SDGE and other major California utilities have pushed for, these changes have been approved by the California Public Utilities Commission.

CARE rates, a low-income subsidy program that allows for discounted electricity rates, will be changing as well. Discounts will be phased in, reducing from 41% to 35% by 2020.

Time-Of-Use Rates will be implemented for all residential customers. This type of rate structure may be more familiar for commercial customers and some solar households already, but at some point in 2019, all residential customers will pay significantly higher prices for electricity consumed from the grid during peak demand periods. On-Peak pricing is currently about double the cost of Off-Peak pricing (depending on your rate structure and the season). This On-Peak period is currently set at 11am-6pm Monday-Friday during the months of May through October. This is actually an advantage for solar customers on the DR-SES rate structure, which allows solar over-production sent to the grid to be credited at retail rates (currently about $0.47/kWh). This On-Peak window is expected to be changed, as soon as 2017, to 2pm-9pm. Solar households that elect to switch to the DR-SES rate structure before this change will get to keep the 11am-6pm window for 5 years from the date their solar PV system was activated.

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