Guide to the PG&E Solar Billing Plan: How Much You Can Save with Solar Power

Pacific Gas and Electric (PG&E) serves about 16 million people across 70,000 square miles in northern and central California. That makes it the largest utility company in the country. 

If you’re a PG&E 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, to

The cost of electricity from PG&E

The average single-family homeowner on the E-1 Residential rate plan from PG&E territory pays $400 per month for electricity or about $4,800 per year. With California electricity prices increasing by 4.1% per year on average, you could end up paying $140,000 or more over the next 20 years in electricity bills.

Adding solar panels with a battery storage system to your home can reduce that expense to about $15 per month, and we estimate that the energy bill savings from that system will pay off the upfront cost in a little over 7.5 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 PG&E. We’ll discuss solar panel cost, savings, incentives, and batteries, too.

How solar saves you money on your PG&E bill

The simple way solar saves you money is by producing electricity that you can use in your home, instead of buying that electricity from PG&E. You usually don’t get to use all the electricity your solar panels produce because the panels 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 PG&E. 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. PG&E’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 Electric Home Rate Plan (E-ELEC). Under the plan, the price you pay for electricity from PG&E 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 should be avoided. This can be accomplished by either:

1.  Adding a battery to store solar energy to use when you can; or

2. Opting for a solar installation sized small enough to rarely produce more electricity than you need during daylight hours.

PG&E Peak and Off-Peak Hours

The E-ELEC plan divides the day into three parts: Off-Peak, Part-Peak, and Peak. 

Off-Peak hours are always from midnight to 3 pm, Part-Peak is from 3 to 4 pm and 9 pm to midnight, and the Peak period is from 4 pm to 9 pm. These hours are consistent 7 days a week, all year round, but the price of electricity during these periods varies based on the season. 

Any electricity you buy during those periods will vary based on the prices shown below:

The cost of going solar for PG&E customers

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 PG&E bill?

Again, the way you save money with solar is by offsetting the costs you would have paid to PG&E 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 the solar-only setup above would pay back its cost in 6.9 years, with an ultimate savings of about $74,000 over 25 years.

The same system with battery costs as described above would pay back its initial cost in 7.5 years, with an ultimate savings of $100,000 over 25 years, including the cost of replacing the battery after 12 years.

Should you install a solar battery as a PG&E 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:

1. 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 where 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.

2. 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.

The steps to go solar in PG&E territory

When you install solar panels on a home in PG&E 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 PG&E electrician come to your home to inspect the installation

• When everything passes inspection, PG&E 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 process usually takes between three to 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 PG&E 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 6.9 to 7.5 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 PG&E price increases.

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