How to Choose the Best SDG&E Rate Structure in 2021

Dealing with utilities can be a confusing process. It’s sometimes overwhelming to understand how all of the different rate structures work, let alone choose the best for your household needs. This is your guide to SDG&E’s rate structures and how to choose the best plan for your home. Most San Diego homeowners are on the “Time-of-Use” rate structure. This means that SDG&E charges different rates depending on the time of day you’re consuming energy.  Luckily, there are multiple Time-of-Use rate structures homeowners can choose from, all with different rates. Homeowners can choose based on their electricity usage. That’s when it’s a good idea to chat with a solar company to guide you towards the best deal based on your usage.  For instance, Stellar Solar can install your solar system that you can use to sell your excess energy back to SDG&E: a fantastic way to neutralize your electric bill. We can also show you useful tricks such as purchasing an electric vehicle and a battery system to fully take advantage of SDG&E’s rates when they are lowest. Let’s check out how Time-of-Use works, how the rate structures work, and how you can get the best ‘bang for your buck’ with a solar system. Time-of-Use Explained So we understand that with Time-of-Use, electricity costs varying amounts depending on the time of day it is being used.  Why? It’s all about balancing the demand for power at different times of the day. When there’s a high demand for electricity, SDG&E has to charge more. It’s just like how Uber and Lyft operate: you pay more for electricity when it’s in high demand and less when it’s not.  Interestingly, these prices also apply to excess solar energy being sold back to SDG&E. When your system produces excess energy during peak solar hours, your excess energy goes into the grid and SDG&E ‘pays’ with a credit on your bill. But here’s a key part: when the excess energy is being generated also affects the amount per kWh SDG&E will pay for it. With SDG&E, they tell you in advance when the prices are highest: from 4pm to 9pm in the summer months, M-F. Conversely, prices are cheapest: from midnight to 6am i.e. when most people are sleeping. While it’s true that you could use less power from 4pm - 9pm and use more power overnight, but let’s be honest, people aren’t going to adopt the vampire lifestyle just to save on their electric bill! If you have a solar system, you will be generating power from 9am - 4pm on most days. This means you'll be buying less from SDGE and often selling excess energy back. In order to offset the power you consume from 4pm-9pm, your solar system has to generate (sell) twice as much during the middle of the day. This is because the value (price) of the electricity doubles after 4pm. This is why getting a battery system can be an electric bill life hack - but more on that later. There are multiple Time-of-Use rate structures to choose from and SDG&E observes three price periods during a 24-hour period: On-peak: When the demand for electricity is highest and prices are highest - typically in the late afternoon / evening.  Off-peak: When the demand is less high and prices are in the mid range - typically mid-day. Super Off-peak: When demand is low and prices are low - typically in the middle of the night and early AM. Prices for these categories differ between Summer and Winter months. Thus, Time-of-Use prices depend on time of day and what time of year it is.  It’s sometimes difficult to choose a pricing structure that is ideal for your electricity consumption. Your choice should be based on multiple factors, including whether you have a solar system, a battery, and an electric vehicle.  Let’s look at pricing and how to optimize your home for the best deal. SDGE Time-of-Use: 2021 Time-of-Use (TOU) is the rate structure that SDGE uses in San Diego. There are multiple types and tiers of Time-of-Use rate structures.  2021 SDG&E Rate Structures and Prices TOU DR-1 Pricing Plan: This plan has three time periods for pricing and offers savings on energy use outside of on-peak hours of 4 p.m. to 9 p.m. as well as during nights and weekends.  TOU DR-2 Pricing Plan: This plan offers a simpler, two time-period plan.Users can save outside of the on-peak hours of 4:00 p.m. to 9:00 p.m. each day. TOU DR-P Pricing Plan: This plan has three pricing plans and also has a ‘Reduce Your Use’ event day component where you would be told to conserve energy which helps the environment and power grid.Standard DR Pricing Plan: It’s simple: the less you use, the less you pay – any time of day or night. This is great for households who don’t use a lot of electricity. Each billing period starts in Tier 1 with the lowest priced energy. If you use higher amounts of energy your pricing increases to Tier 2 for the rest of the billing cycle.​Below are the prices for power by kWh under the different plans. Remember, the Summer Period is between June 1 - October 31, and Winter is between November 1 - May 31.  All rates are effective June 1, 2021.  TOU-DR Rates Period DR-SES TOU-DR TOU-DR1 TOU-DR2 Summer On-Peak $0.57 $0.49 $0.61 $0.58 Summer Off-Peak $0.32 $0.43 $0.36 $0.35 Summer Super Off-Peak $0.28 $0.37 $0.30   Winter On-Peak $0.32 $0.41 $0.43 $0.43 Winter Off-Peak $0.31 $0.40 $0.42 $0.41 Winter Super Off-Peak $0.28 $0.39 $0.40     TOU-DR has a baseline adjustment credit which brings rates down: we recommend it for this reason. EV-TOU Rates Period EV-TOU-5 EV-TOU-2 TOU-DR-P Summer On-Peak $0.56 $0.62 $0.45 Summer Off-Peak $0.31 $0.36 $0.43 Summer Super Off-Peak $0.09 $0.22 $0.33 Winter On-Peak $0.31 $0.37 $0.41 Winter Off-Peak $0.30 $0.35 $0.40 Winter Super Off-Peak $0.09 $0.22 $0.39   Above details rates and how they are calculated. We recommend that you work with a solar provider to examine how much solar you need to minimize your SDGE bill.  Using Solar + Storage to Offset Peak Time Installing a solar system with battery storage is a brilliant way to get the most out of your solar system and avoid SDG&E’s on-peak charges.  It’s a beautiful system: when your solar system produces excess power during the day - your battery is charged with the extra power.  Then - instead of selling your extra power back to SDG&E at off-peak prices, your electricity is saved for use during on-peak pricing time. This means you save serious money over the long-run. It gets especially interesting if you use your battery system in conjunction with your solar and electric vehicle. It's good to minimize your electricity usage when prices are high and maximize when prices are low.  How? If you have a battery, you can (literally) fill up your tank after midnight when prices are the lowest, and then sell back your extra power during prime time when power is the highest. Takeaways Those are the current rates that SDG&E charges for power, and the credits for excess power generation from solar. Rates vary widely based on rate structure, time of year and time of day, and they are always changing.  If you want to learn which rate structure works best for your household, contact Stellar Solar and our Energy Consultants will walk you through the process to help you pick the perfect rate structure according to your energy usage and personal preference. You can simply fill out a quick contact form and our people will reach out to you within 24 hours.

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