Why Is My SDG&E Bill So High?

San Diego Gas & Electric (SDG&E) has some of the highest energy rates in the country, leading to sticker shock for many customers. If your SDG&E bill has been climbing, several factors may be at play. These range from rate increases, seasonal usage changes, and pricing tiers to added fees, delivery charges, and even state energy policies.

This Stellar Solar blog post explores why your SDG&E bill is so high and what you can do to reduce your energy costs.

High Energy Rates in San Diego County

San Diego has some of the highest electricity rates in the United States. In early 2024, SDG&E customers paid around 47 cents per kilowatt-hour (kWh), which is more than double the national average of about 16 cents per kWh. 

Time-of-Use (TOU) Pricing

If you’re on a Time-of-Use (TOU) plan, your bill might be higher because of peak-hour rates. TOU plans charge different prices based on the time of day:

• Peak hours (4 PM – 9 PM) → Highest rates (up to 60 cents/kWh).
• Super off-peak hours (midnight – 6 AM) → Lowest rates (around 20 cents/kWh).

If you’re using major appliances (like air conditioning, dishwashers, or electric vehicles) during peak hours, your bill can skyrocket.

How to Lower Your TOU Costs

• Shift your energy use to off-peak times. Run dishwashers, laundry machines, and charge EVs at night.
• Use a smart thermostat to minimize AC/heater use between 4 PM – 9 PM.
• Invest in a battery storage system if you have solar panels, so you can use stored power during peak times. Stellar Solar is the most experienced battery storage provider in San Diego and can present all your options including the Powerwall 3, Franklin and Enphase batteries.

Seasonal Energy Usage & Weather

Your energy bill often spikes during extreme temperatures.

• Summer (June – September): High air conditioning usage can double or triple your energy consumption.
• Winter (December – February): If you use an electric heater, your bill can increase significantly.

How to Manage Seasonal Costs

• Use ceiling fans instead of AC whenever possible.
• Keep your thermostat at 78°F in summer and 68°F in winter for efficiency.
• Seal windows and doors to prevent air leaks and reduce heating/cooling loss.
• Invest in solar + battery storage

Delivery & Transmission Charges

Your bill isn’t just for the electricity you use; it also includes delivery, transmission, and maintenance fees.

• Electricity Generation Charge → The cost of producing power (around 30%–40% of the bill).
• Delivery Charge → The cost of delivering electricity to your home.
• Public Purpose Programs Charge → Fees for state-mandated energy assistance programs.
• Nuclear Decommissioning Charge → Costs to decommission old power plants.
• Wildfire Hardening Fees → Investments in preventing power-line-related wildfires.

These fees add up, sometimes making up 50% of your total bill.

Can You Reduce These Fees?

Unfortunately, these charges are fixed and unavoidable. However, reducing overall usage lowers how much you pay in tiered rates, which we’ll cover in the section below.

Tiered Pricing System

SDG&E uses a tiered pricing structure, meaning the more electricity you use, the more you pay per kWh.

• Tier 1 (Baseline): Lowest rate, applied to essential energy usage.
• Tier 2: Higher rate when you exceed baseline usage.
• Tier 3 & High-Usage Surcharge: Extremely high rates (sometimes over 50 cents/kWh).

If you cross into higher tiers, your bill can increase exponentially.

How to Stay in a Lower Tier

• Identify high-energy appliances and use them sparingly.
• Install energy-efficient appliances and LED lighting.
• Unplug devices that draw power even when off (phantom loads).

Increased Natural Gas Prices

If you have a gas furnace, stove, or water heater, high natural gas prices may be another reason your bill is expensive.

SDG&E gets its gas from suppliers, and market fluctuations can spike rates. In winter 2022-23, gas bills doubled due to a national gas shortage.

Ways to Cut Gas Costs

• Lower your water heater temperature to 120°F.
• Take shorter showers and insulate pipes.
• Switch to electric appliances if possible (induction cooktops, heat pump water heaters).

Solar Customers & NEM 3.0 Changes

If you have solar panels, recent changes to California’s Net Energy Metering (NEM) policy (NEM 3.0) may have impacted your bill.

• Under NEM 2.0, homeowners got retail-rate credits for excess solar energy sent to the grid.
• Under NEM 3.0 (2023), these credits dropped by 75%, meaning solar users now get less.

This means if you don’t have a battery, you might pay more for energy at night than what you earn from selling excess power during the day, hence the importance of having a battery combined with your solar.

How to Maximize Solar Savings

• Install battery storage to keep excess power for nighttime use.
• Switch to a solar-friendly rate plan like TOU-DR1.
• Use major appliances during peak solar hours (10 AM – 3 PM) instead of at night.

Energy Assistance Programs & Discounts

If you’re struggling with your SDG&E bill, you may qualify for discount programs:

• California Alternate Rates for Energy (CARE) → 30%-35% discount for low-income households.
• Family Electric Rate Assistance (FERA) → 18% discount for moderate-income families.
• Medical Baseline Program → Additional lower-cost energy allotment for customers with medical needs.

Check if you qualify and apply through SDG&E’s website.

 Possible Billing Errors or Meter Issues

While rare, billing errors or meter malfunctions can lead to incorrect charges.

What to Do If You Suspect a Billing Error

• Compare your current and past bills to spot discrepancies.
• Log in to SDG&E’s online portal and check daily usage.
• Request an energy audit from SDG&E to ensure your meter is working correctly.

How to Lower Your SDG&E Bill

Your high SDG&E bill is likely due to a combination of high rates, peak-hour pricing, seasonal changes, tiered pricing, fees, and policy changes. While some costs are unavoidable, there are steps you can take to reduce your bill:

 Shift electricity use to off-peak hours.
 Upgrade to energy-efficient appliances & LED lighting.
 Install solar with battery storage to maximize savings.
 Take advantage of discount programs (CARE, FERA, Medical Baseline).
 Seal windows & doors to improve heating and cooling efficiency.
 Monitor your usage through SDG&E’s online tools.

By making these changes, you can take control of your energy costs and lower your SDG&E bill significantly.

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How the Federal Investment Tax Credit Can Save You Money On Solar

The federal Investment Tax Credit (ITC) is a powerful financial incentive that encourages residential customers to adopt solar energy systems. This credit allows homeowners to deduct 30% of the total cost of their solar installation from their federal tax liability. It applies to systems installed between 2022 and 2032, making solar more affordable for millions of Americans. For example, if a solar system costs $20,000, the homeowner can claim a $6,000 tax credit, significantly lowering the upfront financial burden.

The ITC covers a wide range of expenses, including solar panels, inverters, mounting equipment, and labor costs associated with installation. Additionally, homeowners who pair their solar systems with battery storage can claim the same 30% tax credit for the combined system. Adding a battery can allow you to use stored energy to power your home during times when electricity is most expensive. This makes adding energy storage not only an environmentally friendly option but also a financially sound decision, especially for those looking to maximize their energy independence.

For San Diego residents, the 30% ITC is particularly impactful. The region’s year-round sunshine ensures that solar panels can produce substantial energy, maximizing the value of the system and the tax credit. San Diego homeowners often see faster returns on their solar investments compared to other areas, thanks to the high solar production potential. Furthermore, the area’s high electricity rates mean that switching to solar offers substantial long-term savings, making the ITC even more beneficial.

The ITC is not only a financial incentive but also an investment in the value of your home. Studies show that homes with solar systems sell faster and at higher prices than those without. For San Diego residents, this is an excellent opportunity to increase property values while simultaneously lowering energy bills. The 30% tax credit helps offset initial installation costs, making solar energy a cost-effective way to immediately enhance home value and energy efficiency.

Stellar Solar, a leading name in the San Diego solar industry, is uniquely equipped to help homeowners take full advantage of the ITC. With over 27 years of experience and a reputation for excellent customer service, Stellar Solar has guided tens of thousands of homeowners through the process of going solar. From system design to installation, our team provides personalized solutions tailored to each household’s energy needs and financial goals. Our industry-leading equipment and highly trained installation teams will make sure that your solar system delivers maximum energy output for your home. This, in combination with the 30% tax credit, allows us to offer affordable solar systems that pay for themselves in just a few years.

The 30% ITC is a game-changer for residential solar, making it more accessible and affordable. For San Diego residents, the combination of abundant sunlight, high electricity costs, and Stellar Solar’s expertise makes now the perfect time to invest in solar energy. With Stellar Solar as your partner, you can confidently reduce energy costs, increase your home’s value, and contribute to a sustainable future. Click here to get your free quote today!

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