PG&E is our local utility. It provides natural gas and electricity for businesses and residents throughout the Central Coast. Since solar PV impacts electricity bills, I will be focusing in on electricity and how you buy it from PG&E.
Electricity
PG&E sells you electricity in kilowatt-hours (kWh). A typical California household uses around 7,500 kWh in a year or about $80 per month in electricity.
How much electricity is used in the home is dependent on many things:
- Climate
- Size of home
- Mix of electric and natural gas appliances
- Number of occupants
- Electric vehicle use, etc.
Every home is unique and electricity usage varies greatly from house to house. That is one of the reasons why solar companies always ask for your PG&E bill.
Rate Tariffs
PG&E clients have choices in how PG&E bills their electricity consumption.
Most of us are on a Tiered Billing tariff, E-1. Some of us may be on a Time-of-Use (TOU) like E-6 or E-7.
Here are the differences:
E-1
E-1 tariff has four tiers that are based on a Baseline level of electricity. Baseline is a quantity of electricity set by climate zone and generally is the amount of energy you would need to run the refrigerator and keep the lights on. As a family uses more energy, rates go up to higher tiers.
Here is how it works:
- Tier 1:$0.16 per kWh (Baseline Amount)
- Tier 2: $0.18 per kWh (101% to 130% of Baseline)
- Tier 3: $0.27 per kWh (131% to 200% of Baseline)
- Tier 4: $0.33 per kWh (201% to 300+% of Baseline)
The more you use the more you pay.
Many homeowners with high electricity bills get stuck paying Tier 4 rates. This may be due to having a large family, hot tub, or even a pump to extract water from a well.
Bills quickly go up when you start to pay $0.33 per kWh.
E-6 Time-of-Use (TOU)
E-6 and E-7 are Time of Use tariffs. The rate you pay for electricity is dependent on when you use electricity.
Generally, daytime electricity is more expensive than night time electricity because businesses demand a lot of power during the day.
PG&E has a tough time powering businesses and homes during peak demand. It offers time of use rates tariffs to encourage families to use less during the day.
Here is how the Time-of-Use Tariff generally works:
- 11 pm to 10 am: $0.13 per kWh (Off Peak)
- 10 am to 1 pm: $0.21 per kWh (Partial Peak)
- 1 pm to 10 pm: $0.32 per kWh (Peak)
Details vary between E-6 and E-7 but time of use determines the price. Prices are high during business hours due to electricity being in peak demand.
Electric Vehicle rates are Time-of-Use as well. If you are on EV-A or EV-B, it is designed to give you a discount to charge your EV at night when electricity is in low demand.
Solar and PG&E
California is focused on reinventing our energy economy. It decoupled profit from selling energy in the 1970’s to encourage energy efficiency.
Now, California is focused on renewable energy sources and getting more clean energy to power the grid. To encourage the adoption of solar, California has established a great Net Energy Metering program that utilities are forced to honor.
Net Energy Metering
Net Energy Metering (NEM) simply means the meter spins forward and backward. When a homeowner generates his own power from solar the electricity meter actually spins backward.
Currently the Net Energy Metering program favors homeowners. PG&E is forced to credit accounts at the retail rate when the meter spins backward from solar power generation. That means when your solar system is operating during the day you are banking credits at the same rates PG&E sells them to you.
To demonstrate, take a look at my PG&E bill:
I am on E-6 Residential Time-of-Use and am enrolled in the Net Energy Metering Program.
The power generated from solar is the negative kWh numbers in the middle and the rates I am getting credited at on the right. I accrued $112 of credit with PG&E in the first half of May, not bad.
Here is how that works on the solar side:
The red parabola shape is a graph of power produced from solar in a day. The blue bars signify the rate at which PG&E has credited me. This is a typical summer day for my solar system of 20 SolarWorld modules.
Key Point
I am saving money with solar. By going solar and moving to a Time of Use rate tariff, I save even more. Energy prices are at their highest when my solar system is producing the most power. At night, I charge my EV for $0.13 per kWh and during the day I bank credits at $0.33 per kWh.
Net Energy Metering is helping me save a lot. That is scheduled to change soon.
Once PG&E’s grid has 5% of electricity from solar, the Net Energy Metering agreement is going to move to help PG&E. Homeowners will get credited from producing power at a reduced rate; the wholesale rate PG&E buys power at (~$0.05 per kWh).
California Supports Solar
California is not going to let NEM changes affect homeowners who already went solar. If you go solar before the Net Energy Metering agreement changes, the State will make PG&E honor the current NEM for 20-years.
Big picture is, producing your own power with solar pays you, literally.
If you have any questions regarding your PG&E bill or any of the content I covered, send me an email at nate@allterrasolar.com.
