Updated 2 days ago
How SCE customers can save money with solar panels
Written by
Ben Zientara
Find out how much money solar panels can save on your SCE bill based on recent installations in your area
Southern California Edison (SCE) serves about 15 million people across 50,000 square miles of Southern California. If you’re an Edison customer, you know electricity isn’t cheap. You’ve probably also noticed how many of your neighbors are turning to rooftop solar power to reduce those high electric bills.
Are you ready to see if solar can work for you, too?
HERE ARE THE QUICK FACTS
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If you get solar panels installed today, you must sign up for SCE's Solar Billing Plan (aka Net Billing or NEM 3) and switch to a time of use electricity rate plan.
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Under the Solar Billing Plan, excess solar energy your solar system generates and sends to the grid earns a credit worth less than the full retail rate of electricity.
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If your average SCE electric bill is $250 or higher, we recommend getting enough solar panels to cover your annual electricity usage and a battery energy storage system to ensure you get the most savings.
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If you use less electricity or want to get solar panels without a battery, choose a system sized to make about half of the electricity you use in a year. It won't reduce your electric bill by as much, but you will save more for each kilowatt-hour of solar energy generation.
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We estimate that an average-sized solar installation for an SCE customer will pay back its cost in 7.5 years without a battery, or 8.5 years with a battery.
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The best way to assess your needs is to calculate your savings potential and connect with local solar companies through our solar estimator.
The cost of electricity from Southern California Edison
The average single-family homeowner on the Domestic rate plan from SCE territory pays $350 per month for electricity or about $4,200 per year. With California electricity prices increasing by 4.1% annually on average, you could pay $130,000 or more over the next 20 years.
Adding solar panels with a battery storage system to your home can reduce your SCE bill to about $10 per month, and we estimate that the energy bill savings from that system will pay off the upfront cost in a little over 8 years.
If you’re interested in solar panels for your home, your first step is to learn as much as you can. Below, we’ll cover all you need to know about going solar with SCE. We’ll discuss solar panel costs, savings, incentives, and batteries, too.
How solar saves you money on your SCE bill
The simple way solar saves you money is by producing electricity you can use in your home, instead of buying that electricity from Edison. You usually don’t get to use all the electricity your solar panels produce because they make most of their electricity when the sun is high in the sky and you aren’t at home.
Unless you have a battery, the excess electricity gets sent to your neighbors via the distribution wires owned by Edison. This is where the California Public Utilities Commission (CPUC) makes things complicated.
Net billing (aka The Solar Billing Plan)
In 2022, the CPUC enacted new rules called “Net Billing” (aka NEM 3.0) for what happens to the excess energy your solar panels make. Southern California Edison’s version of Net Billing is called “the Solar Billing Plan.”
Under the plan, the value of exported solar energy varies throughout the year, with a different price for every hour of the day that changes based on the month and whether it is a weekday or weekend.
On top of the changing export credits, the Solar Billing Plan forces you to sign up for a time of use rate plan called TOU-D-PRIME. Under the plan, the price you pay for electricity from Edison changes based on the time of day. Specifically, it becomes more expensive in the evenings.
The most important thing to know about the changing values is that solar export credits are generally much lower than the retail cost of electricity, meaning sending excess electricity is a bad financial move that you should avoid. This can be accomplished by either:
Adding a battery to store solar energy so that you can use it later; or
Opt for a smaller solar installation that only covers the electricity that you need during daylight hours.
Southern California Edison Off-Peak Hours
The TOU-D-PRIME plan comes with off-peak and on-peak rates based on the time of day and season. Off-peak hours are always from 9 pm on one day until 4 pm the next, and peak periods are from 4 pm to 9 pm. Any electricity you buy during those hours will vary based on the prices shown below:
Season | Time period | Hours | Cost |
|---|---|---|---|
Summer (June - September) | Weekday On-Peak | 4 pm to 9 pm | $0.56 per kWh |
Weekend Mid-Peak | 4 pm to 9 pm | $0.38 per kWh | |
All days Off-Peak | 9 pm to 4 pm the next day | $0.26 per kWh | |
Winter (October - May) | All days Mid-Peak | 4 pm to 9 pm | $0.53 per kWh |
All days Off-Peak | 9 pm to 8 am the next day | $0.24 per kWh | |
All days Super Off-Peak | 8 am to 4 pm | $0.24 per kWh |
The cost of going solar for SCE customers
System configuration | Estimated cost after tax credit | Payback time |
|---|---|---|
7.2 kW solar, no battery | $15,820 | 7.5 years |
7.2 kW solar, 16.6 kWh battery | $25,620 | 8.5 years |
The current cost of solar panels in California is $3.14 per watt for a 7.2-kW system, which would be an appropriate size for someone with a $250 electric bill. Solar panels get cheaper per watt of generating power as you size up and more expensive as you size down.
If you pay cash for the 7.2-kW solar installation, you would pay about $22,600 in up-front costs, with a federal solar tax credit of 30%, or $6,780, available to people who would have paid at least that much in taxes for the year of installation.
Adding an average-sized 16.6-kWh battery like the Canadian Solar EP Cube to that solar system would cost an additional $14,000 or so, with a $4,200 federal tax credit for eligible taxpayers.
How much money can solar panels save on your SCE bill?
Again, the way you save money with solar is by offsetting the costs you would have paid to Edison for electricity, but those offsets are reduced if you have solar only.
For a home with a monthly bill of around $300, we estimate that a 7.2 kW solar-only setup would pay back its cost in 7.5 years, with an ultimate savings of about $67,000 over 25 years.
The same system with a $14,000 battery system would pay back its initial cost in 8.5 years, with an ultimate savings of $80,000 over 25 years, including the cost of replacing the battery after 12 years.
Reminder: Solar payback time and return on investment varies for every individual homeowner based on several factors. This is just an estimate based on average numbers.
Should you install a solar battery as an SCE customer?
Our general rule for whether you should get a battery with your solar installation boils down to one simple thing: if your average monthly electric bill is over $250, maximize your solar panels and get batteries to store daily excess energy.
There are two reasons we recommend that:
The amount of excess energy generated from a solar installation fluctuates throughout the year, with the highest solar output coming during the summer months. These are the months when a sizable portion of your solar energy will be sent to the grid. If you don’t need a larger solar installation, it’s likely that you won’t ever have too much excess electricity to store in batteries.
The most significant cost of adding batteries comes from the electrical work that must be done to connect them to your home. The batteries themselves still represent a significant cost, but the difference between adding a small battery (under 10 kWh) and a larger one.
We realize that an electricity bill under $250 can still be a really huge burden, and solar panels can work well to reduce a large portion of that! If you get a solar installation sized to produce only about half of the electricity you use in a year, you can minimize the likelihood of sending any power back to the grid.
That means most or all of the solar energy you generate will go directly toward reducing your electric bill. Your up-front cost will be cheaper, and you’ll still save money.
Home backup power
The other reason to choose a battery in SCE territory is for home backup power.
Batteries are very good at keeping important lights and appliances running in the event of a grid outage—something that’s been happening more often as SCE tries to prevent forest fires. In 2020, SCE shut power off 16 times, including on Thanksgiving Day.
The peace of mind that comes with knowing you have backup power if the grid goes down is invaluable for many people. In fact, backup power access is the main driver for home energy storage adoption, according to our Solar Industry Survey.
California has recognized how important energy storage can be and now offers millions of dollars in statewide battery storage incentives under the Self-Generation Incentive Program (SGIP). If you qualify for incentives, SGIP can save you thousands of dollars on a battery storage system for your home.
The steps to go solar in SCE territory
When you install solar panels on a home in SCE territory, these are the steps you follow:
Get an estimate of how many solar panels you’ll need based on your average bill
Ask local solar installation companies for quotes for your home
Evaluate the quotes, read reviews of solar companies, and pick the best one
Your solar installer designs your system and applies for permits to construct it and connect it to the grid (also known as ‘interconnection’)
The solar company receives permission to install the solar panels and completes the installation
A local inspector and SCE electrician come to your home to inspect the installation
When everything passes inspection, SCE grants permission to operate (PTO), and you can flip the switch on your system to begin generating electricity
The first thing to do is estimate how many solar panels you’ll need and get quotes from installers.
SolarReviews makes that easy with our solar calculator. The calculator can give you an idea of the size system you need and an estimate of the cost and savings for your specific home. Once you have those numbers, you can request live quotes from installers in your area - if you wish.
Length of the solar installation process
The whole solar installation process usually takes between three and four months to complete as long as everything goes according to plan.
The actual installation will take one to two days with workers on your roof and installing other system components like the inverter and the main connection to your home’s electrical panel. Once you’ve gotten permission to operate, simply turn your system on and start saving money!
Is solar worth it for SCE customers?
The short, easy answer to the question above is YES. But of course, as we discussed above, things can get complicated between the Solar Billing Plan and the decision of whether or not to choose a battery.
Still, with an average of 7.5 to 8.5 years of solar payback time for a well-crafted installation, solar panels represent a great opportunity for homeowners to partially remove themselves from the never-ending cycle of SCE price increases.
Other California solar resources
Ben Zientara is a writer, researcher, and solar policy analyst who has written about the residential solar industry, the electric grid, and state utility policy since 2013. His early work included leading the team that produced the annual State Solar Power Rankings Report for the Solar Power Rocks website from 2015 to 2020. The rankings were utilized and referenced by a diverse mix of policymakers, advocacy groups, and media including The Center...
Learn more about Ben Zientara