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Understanding your Net Metering Billing Statement

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Understanding your Net Metering Billing Statement

Have you ever had questions regarding your Net Energy Metering (NEM) billing statement? Safe to say you’re not alone! Here at Cosmic Solar, because of the large customer base we’ve acquired over the last 11 years, we receive daily calls on how to read your billing statement. We will be the first to say it’s complicated, which is why we wanted to help provide a more detailed assessment of how SDGE solar NEM billing works.

First off, because of the nature of solar energy — where much of it is produced in the summer and less energy is produced during the winter — SDGE issues billing “statements,” rather than a monthly bill. (It would be too cumbersome to “settle up” each month with solar customers, so NEM customers are put on an annual schedule for billing.) Solar credits are applied to your electric account over a 12-month billing period and at the end of this period, solar customers reach the “true up” date, which ends the 12-month billing period and can occur any time of the year, since customers energize their solar systems every month out of the year.


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Understanding Your NEM Statement FINAL

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If you happen to be under the most popular Standard-DR Residential rate structure, during the true up period, SDGE “settles” your account and it resets for the next year. If you see a positive kWh reading under your Year to Date (YTD) Totals, this means, for the past 12 months, more energy was delivered to your home from SDGE’s grid than was “back fed” to the grid from your solar system — in other words, there was an annual production deficit and SDGE will settle the account to determine what is owed at the end of the year. You will be required to pay for the extra energy you drew from the grid and this charge will be shown under your Current Account Balance.

Conversely, if, under your YTD Totals, you see a negative number (or a number in parentheses), this means for the past 12 months fewer kWhs were delivered to your home from SDGE’s grid and you were able to bank a credit. Congratulations! This credit will be shown under your Current Account Balance.

If it’s ever not clear whether or not a payment is required, or if a credit has been issued for “overproduction,” please see the line item that says Payment Required This Month for clarification.

Time of Use-TOU-Residential

Another billing rate program which some solar customers decide to change to upon discussing various rate structures with SDGE is called Time of Use (TOU). There are various types of TOU, for electric vehicle owners, for example or others who might benefit from paying for each kWh they receive from the grid and receiving a set amount of credit for their solar backfeed during certain times of the day.

TOU rates can vary widely based on the type of program you’re on. Different hours of the day present various credits and charges, which are typically determined based on the demand for power from the grid during different times of the day.

With that said, a kWh produced and back fed to the grid will earn a solar TOU customer a specific amount of money depending on the time of day and, conversely, a kWh used from the grid will also cost a specific amount of money depending on when it’s used in the home.

Current NEM solar customers are “grandfathered in” to NEM programs for 20 years from their Permission to Operate date. However, these customers can choose to switch from the tiered structure (the default rate structure provided from SDGE when going solar) to a Time of Use rate structure if it makes financial sense to do so and if it is within five years of their Permission to Operate date. Switching from the default tiered NEM rate to a TOU rate locks a solar customer into the TOU rate for at least one year and, after that time, SDGE allows switching back to the NEM tiers if desired.

Because SDGE rate structures and offerings can cause confusion and questions with customers, consulting SDGE to determine if it may be of benefit to switch from one to another is always recommended. To add more information on your plate, in 2019 SDGE is slated to bump all NEM tiered customers to the upcoming TOU rates — as all new solar customers will be required to switch to TOU by mid 2018 and beyond. It is possible to switch back to the NEM tiered structure if desired once SDGE makes this change in 2019. (Stick with us, we told you it was complicated!)

Upcoming TOU Changes and Things to Be Aware Of

On April 1st, 2018, proposed changes with SDGE and the California Public Utilities Commission will require all new solar customers to adhere to new TOU standards, which will most likely push peak rates to the late afternoon from the current 11:00am to 6:00pm time slot. This isn’t a “dealbreaker” for customers who still would like to go solar, but it may present changes in solar system design and promote the introduction of solar batteries to help store and discharge energy during various times of the day.

Since these changes haven’t been approved or implemented yet, we won’t review them in great detail here quite yet, but, suffice to say, changes to the way energy is produced, stored and distributed to solar customers is on the horizon and will play a major part in how utilities conduct their businesses and ensure their customers a constant and reliable flow of power in 2019 and beyond. There will definitely be more to come on this topic.

I have more questions

We knew you would! SDGE’s billing can be a tricky and complicated topic and, because of the multitude of factors that are involved in production of solar power, weather patterns, direction of the sun and others, production of solar power rarely matches up with required energy demand in the home on a daily or monthly basis. This can sometimes lead to more questions than answers when reviewing your billing statement. But there’s definitely a reasonable explanation for your questions and SDGE has a staff of very educated and friendly technicians that are happy to help review your bill and educate further on how charges and credits are implemented. When in doubt, please feel free to contact the experts at SDGE for more specific information about your account at (800) 411-7343 or by visiting