Southern California Edison is about to make a big change in the way it charges its customers, and it will have a huge effect on the economics of adding solar to their homes. The change, set to go into effect on March 1st, will alter Time of Use (TOU) billing for Edison customers by moving the peak hours to later in the day. To understand how this will affect you, let’s get clear on two terms:
Net Energy Metering (NEM)
Time of Use (TOU)
Net Metering – As explained on SCE’s web site: “The energy you produce, minus the energy you consume, equals net energy. [SCE will] deduct the energy you export to the grid at times when generation exceeds on-site demand from your bill, and you may even earn surplus credits for the energy you produce.”
Time of Use – On a Time of Use (TOU) rate plan, SCE charges you more for electricity at certain peak times during the day. When your solar panels overproduce, they also buy that power at a higher rate. All SCE solar customers must be on a TOU plan. View the time periods for each TOU rate options.
Right now, Monday through Friday 2-8 PM are SCE’s peak hours. That’s great for solar customers, because those are hours when your solar panels producing the most, and it’s a time when a lot of people aren’t home. Solar customers generate energy, sell it to the utility, and make the highest amount of money that the utility offers. After March 1st, the hours change to 4 PM to 9PM. That means solar customers will be charged more for energy at that time and will be credited less when the panels are at peak performance.
Here’s how it works: Solar panels generate the most electricity for your house in the middle of the day.
Right now, the most expensive electricity Edison will sell is at $0.47 per watt between 2 PM and 8 PM. In most cases with solar, you are generating more electricity than you use in the middle of the day. You sell a lot of that excess electricity back to Edison at $0.47 per watt.
After March 1st, Edison will move new solar customers to a Time of Use Plan and change its peak period to 4 PM to 9 PM. That means the most expensive energy is coming into your home when your solar panels have stopped working for the day. And the power that you sell to them in the middle of the day will now only be worth $0.22 per watt.
Now is the time to put a high efficiency SunPower system on your house and be grandfathered into the current rate structure for 5 years. To have the system installed by March 1st, you’ll need to purchase by around mid-December. Get the ball rolling now and learn how you can save.