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San Diego Gas & Electric (SDG&E) Net Metering

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How does San Diego Gas & Electric (SDG&E) net metering work?

San Diego Gas & Electric’s net metering program makes it possible for solar energy system owners who are connected to the grid to receive credit for their excess solar electricity. These credits can be used when your solar panel system isn’t producing enough power to meet the electricity demands for your home or business. However, SDG&E net metering isn’t a way to earn extra money – in order to qualify, your solar panel system must be sized to match your electricity needs, but no bigger.

Where does SDG&E offer net metering?

San Diego Gas & Electric offers net metering across its entire service territory, which includes all of San Diego County as well as southern Orange County.

What are SDG&E’s rates and prices for net metering?

The specific rates and pricing for net metering in San Diego Gas & Electric’s territory are determined based on your property’s electricity rate structure. However, the structure is simple: for each kilowatt-hour (kWh) you feed back to the grid, you get a credit on your bill for the full retail value of that kWh (e.g., the rate that you pay for a utility-generated kWh). New residential solar customers currently pay between $0.22 and $0.50 per kWh, depending on the month and time of day. The SDG&E website has the most current information on NEM rates for residential customers.

The SDG&E net metering program saw some changes under net metering 2.0, which are documented below. SDG&E offers more details in their net metering overview.

Net metering 1.0 (before June 2016)
Net metering 2.0 (before
June 2016)
Credits for exported electricity

Full retail rate

Ful retail rate

Non-bypassable charges

Paid for electricity drawn from

the grid during a billing period

Paid for all electricity used

during a billing period

System size regulations

System must be no larger

than customer’s electricity

needs, and less than 1,000


System must be no larger

than customer’s electricity

needs, but no restriction

on size

Interconnection fee


$132 for systems under

1,000 kW

Electricity rate


Time-of-use (variable based

on time of day and season)

What is San Diego Gas & Electric’s net metering cap?

Under California’s original net metering policy, SDG&E had a net metering cap of five percent of total peak electricity demand in the utility’s territory. However, as of June 2016 SDG&E has transitioned to net metering (NEM) 2.0. Under NEM 2.0, there is no cap on net metering in SDG&E territory.

Is SDG&E net metering the best in California?

SDG&E’s net metering program is structured the same way as the two other largest utilities in the state, Pacific Gas & Electric and Southern California Edison. The economics of the net metering program for these three utilities will be very similar.

However, there are some other electric utilities (such as Los Angeles Department of Water & Power) in California that offer simpler net metering policies, because they don’t require solar system owners to enroll in time-of-use (TOU) rates. Because SDG&E’s NEM 2.0 program uses TOU rates, solar homeowners won’t always get the maximum value out of their solar electricity – grid electricity during the early to mid-afternoon hours will cost less, so the solar electricity sent back to the grid during those times will receive a lower net metering credit. That being said, a good solar installer can help you design a solar system that generates more power during the high-cost peak hours, reducing your monthly utility electricity needs.

What will happen to my excess SDG&E net metering bill credits?

If you install a solar panel system that is sized to meet your electricity needs for the entire year, there will be some months where your panels produce more electricity than you need and some months where your panels produce less.

When your panels produce more energy than you can use over the course of a month, you will receive bill credits on your SDG&E bill that can be used in future months. If your panels produce more electricity than you use over the course of twelve months, you are credited for the extra kilowatt-hours at the wholesale compensation price.

To set the value of the wholesale compensation price, SDG&E calculates a per-kilowatt hour value for each month based on electricity market prices. At the end of twelve months, you will receive a bill credit for any extra electricity at the rate that SDG&E has determined for that month.

Does San Diego Gas & Electric offer solar incentives?

SDG&E doesn’t offer solar incentives for every homeowner. However, the California Solar Initiative has two rebate programs that low-income households in SDG&E’s service territory can qualify for: the Single-Family Affordable Solar Housing (SASH) and Multi-Family Affordable Solar Housing (MASH) programs.

SDG&E solar interconnection policies and costs

The last step to have your solar panels connected to the grid is to submit an interconnection request, which your solar installer will often do on your behalf. The interconnection request ensures that SDG&E is aware that your property has a solar power system and that your system is safe to operate. Under NEM 2.0, the interconnection request fee is $132.

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