Your Guide to PG&E Net Metering

PG&E's Net Metering is a billing arrangement that gives homeowners with solar panels full retail credit for the extra electricity their system feeds into the grid. It lets you effectively "spin your meter backward," using the grid almost like a giant battery to store the value of your solar energy. The result? A much, much lower monthly PG&E bill.

How PG&E Net Metering Really Works

Think of the electrical grid as a massive, shared power bank for your whole community. PG&E’s Net Metering (NEM) program is what lets your solar-powered home connect to this bank. Your roof becomes a personal power plant, generating valuable credits every time the sun is out. It’s a simple idea, but it’s the financial engine that makes going solar in California so attractive.

During the day, your solar panels are often cranking out more electricity than you can use at that moment. Instead of letting that power just disappear, your system automatically sends it out to the grid for your neighbors to use. You can think of it as making a deposit into that shared power bank.

The Flow of Energy and Credits

PG&E keeps a running tab of every kilowatt-hour (kWh) you “deposit.” For each kWh you send out, you get a credit on your utility bill. And it's not a partial credit, either. Under the popular NEM 2.0 program, that credit is equal to the full retail price of electricity at that exact time.

Later on, at night or on a cloudy day, your panels aren't producing, so your home needs to draw power from the grid. This is like making a "withdrawal" from the power bank. But instead of paying for that electricity out of pocket, you simply use the credits you racked up earlier. This back-and-forth exchange is what slashes your electricity bills.

The Core Value: The whole point of net metering is that you get credited at the same rate you would have paid for that electricity. This one-to-one swap is what makes solar such a solid financial move for PG&E customers.

Turning Credits into Real Savings

The real proof shows up on your monthly PG&E statement. The utility adds up all the energy you pulled from the grid and subtracts all the energy credits your system generated. For many homeowners, their solar production creates enough credits to wipe out their energy charges entirely, leaving only small, unavoidable monthly connection fees. This is where you see the true power of going solar.

A well-designed solar system does more than just make electricity; it’s built to play this give-and-take game with the grid to save you the most money. Here’s a quick look at how it works:

• Daytime Surplus: Your system is sized to produce extra power during peak sun hours, banking credits for when you'll need them.

• Nighttime Use: After the sun goes down, you draw from those banked credits to run your home, avoiding the need to buy expensive power from the utility.

• Reduced Bills: The end result is a dramatically lower and more predictable monthly bill, often just a tiny fraction of what you used to pay.

Getting a handle on this basic concept is the first step to really making the program work for you and unlocking some incredible savings. To see how a system designed specifically for your home can turn this energy exchange into real, tangible financial benefits, you can explore our expert solar services today.

The Journey from NEM 1.0 to NEM 2.0

To really get a feel for how good the current PG&E net metering program is, it helps to look back at how we got here. This policy wasn't just created out of thin air. It’s the product of years of careful tweaks and planning designed to grow California's solar industry while keeping the power grid stable for everyone.

The story really kicks off back in 1995 when California rolled out the first version of Net Energy Metering, which we now call NEM 1.0. This was a landmark policy. For the first time, homeowners with solar could get full retail credit for any extra power they pushed back to the grid. This simple one-to-one swap was the spark that ignited the state's residential solar boom.

This evolution was pushed forward by landmark state laws. It all started with Senate Bill 656, which launched NEM 1.0. The program was so successful that Assembly Bill 327 was passed in 2013 to create its successor, NEM 2.0, ensuring solar's growth would continue even after utilities hit their original program caps. By July 2017, all the big players, including PG&E, had made the switch. You can dive into the nitty-gritty of these decisions and learn more about California's landmark net metering policies directly from the CPUC.

Why the Change to NEM 2.0 Was Necessary

As solar panels got cheaper and more people jumped on board with NEM 1.0, California's energy grid started to look very different. The program worked almost too well, and utilities were getting close to their limits on how many solar customers they could handle under the old rules.

Policymakers saw this coming. They needed a new plan that could support the explosion in solar adoption while being fair to all utility customers—both those with solar panels and those without. NEM 2.0 was designed as a thoughtful update, not a drastic overhaul. It struck a new balance: keeping solar attractive for homeowners while making slight adjustments to account for the shared costs of maintaining the grid.

The bottom line: The move from NEM 1.0 to NEM 2.0 shows that California is in it for the long haul. It's proof that the state is committed to making local solar power a permanent part of our energy mix by adapting the rules to keep the program healthy and sustainable.

The Core Differences Between the Programs

So, what actually changed? While the basic idea of getting credit for your extra solar power is the same, NEM 2.0 brought in a few key updates. Understanding them is key to seeing how you save money today.

• Time-of-Use (TOU) Rates Became Standard: This was the biggest shift. Under NEM 2.0, new solar customers were required to be on a Time-of-Use rate plan. This simply means the price of electricity changes depending on the time of day, encouraging people to use energy when it's cheapest and most abundant.

• Non-Bypassable Charges (NBCs): A small charge was added for every kilowatt-hour (kWh) of energy you pull from the grid. These NBCs, usually just a couple of cents per kWh, help cover the costs of public-purpose programs and general grid upkeep, ensuring everyone pays their fair share.

• One-time Interconnection Fee: A small, one-time fee was introduced to cover the utility's administrative costs for getting your solar system safely connected to their grid.

These tweaks ensure that PG&E's net metering program remains fair and can continue for years to come. Our solar team is always on top of these policy details, so we can design systems perfectly tuned to get you the biggest possible savings under the current NEM 2.0 rules. Ready to see how these rules apply to your home? Contact our solar services team for a custom quote.

Decoding Your PG&E Solar Bill

Getting that first PG&E bill after your solar panels are switched on can feel a bit like reading a foreign language. It's packed with new terms and numbers, but once you know what to look for, it becomes a powerful report card showing your investment at work. Let's walk through it together, so you can see exactly how much you're saving.

The magic behind your savings comes down to one key concept: the full retail rate credit. Under PG&E's Net Metering 2.0 (NEM 2.0), any time your panels generate more power than you’re using, that extra electricity doesn't go to waste. It flows back to the grid, and PG&E gives you a credit for every single kilowatt-hour (kWh).

Think of it this way: if electricity costs $0.35 per kWh on a sunny afternoon, every excess kWh your system exports earns you a $0.35 credit. These credits stack up in your account, ready to automatically pay for any electricity you need to pull from the grid later, like after the sun goes down.

Anatomy of a PG&E Solar Bill Under NEM 2.0

To really get a handle on your new bill, it helps to see how all the pieces fit together. This table breaks down the main components you'll see each month.

Billing ComponentWhat It Means For YouExample Impact on Your BillNet Energy ChargesThis is the core of your bill, showing the total electricity you used from the grid minus the credits your solar system earned. A negative number means you generated more than you used!Shows a net credit of -$25.00, reducing your overall balance.Solar CreditsThis line item explicitly shows the value of the excess energy your system sent to the grid, calculated at the full retail rate.Your bill might show you earned $75.00 in credits this month.Non-Bypassable Charges (NBCs)These are small, mandatory fees (around $0.02-$0.03/kWh) on energy you pull from the grid. They fund public programs and can't be offset by solar credits.A small charge of $4.50 for grid-supplied power.Minimum Delivery ChargesEven if your energy charges are zero, there's a small monthly fee (around $10) to stay connected to the grid. Solar credits can often cover this.Your $10.00 charge is covered by your banked solar credits.

Seeing these components laid out makes it clear: your solar credits tackle the big energy costs, leaving only minor, predictable charges behind.

Understanding Non-Bypassable Charges

As you look over your statement, you'll spot a line item for non-bypassable charges (NBCs). It’s a common point of confusion, but the concept is straightforward. These are small, mandatory fees that every utility customer, including solar owners, pays on each kWh of power they pull from the grid.

Think of them as a shared contribution to keeping the lights on for everyone. These charges, usually just $0.02 to $0.03 per kWh, help fund important statewide programs and grid maintenance. So, while your solar credits can wipe out your energy usage costs, NBCs are a separate, fixed part of the utility structure.

The Annual True-Up: Your Yearly Solar Settlement

One of the best parts of the NEM 2.0 program is that it smooths out your payments over the year. Your monthly statements are just progress reports, tracking the give-and-take of energy and credits. The real settlement only happens once a year in an event called the annual true-up.

Here's how it works:

• For 11 months, you just pay your basic connection fees and any non-bypassable charges. Your energy credits or debits simply roll over from one month to the next.

• At the end of your 12-month billing cycle, PG&E does the final math. They tally up all the energy you bought from the grid and subtract all the credits you earned.

If you have a balance left over, you pay it in one lump sum. If you actually produced more power than you used all year, PG&E sends you a check for the surplus. This annual system prevents bill shock from a cloudy month and gives you a clear, simple summary of your net energy costs for the year.

Key Takeaway: The goal isn't to become a power plant for the grid; it's to zero out your own energy costs over the course of a year. A well-designed system, sized for your specific needs, hits this sweet spot by perfectly balancing your energy production with your family's consumption.

Getting comfortable with these financial details is a huge part of a successful solar journey. Our team makes sure every client understands their new bill, so you can confidently track your savings from day one. If you're curious about what your specific savings could look like, contact our team for a transparent, no-obligation consultation.

Using Time-Of-Use Rates to Maximize Savings

This is where the real strategy behind PG&E’s net metering program comes into play. If you're on NEM 2.0, you're automatically on a Time-Of-Use (TOU) rate plan. Getting a handle on this system isn't just a good idea—it’s the single most effective way to cut down your electricity costs and squeeze every last drop of value from your solar panels.

Think of TOU rates like airline tickets. Flying at 6 AM on a Tuesday is cheap, but a flight at 5 PM on a Friday costs a fortune because that's when everyone wants to travel. PG&E’s electricity works the exact same way. The price you pay changes based on how much demand is on the grid. Your goal is to use grid power when it's cheap and sell your extra solar power back when the price is highest.

Understanding Peak and Off-Peak Pricing

PG&E’s TOU plans carve the day up into different pricing windows. The exact hours can shift a bit depending on your specific plan, but they generally boil down to two main categories:

• Peak Hours: This is prime time for electricity, making it the most expensive period. It’s typically in the late afternoon and early evening (think 4 PM to 9 PM) when everyone gets home, flips on the lights, and starts cooking dinner.

• Off-Peak Hours: This is when power is cheapest. It covers the daytime when your solar panels are cranking out energy, plus the late-night and early-morning hours when most people are asleep and grid demand is low.

The strategy is beautifully simple: avoid pulling power from the grid during those expensive peak hours. Instead, shift your heavy energy use to the much cheaper off-peak times.

This simple shift in timing is the secret sauce. When you consciously use energy when it costs less and export your valuable solar power when it's worth more, you're essentially playing the energy market to your own advantage.

Practical Strategies for TOU Savings

Making TOU rates work for you doesn’t mean you have to completely overhaul your life. It’s really just about building a few smart habits until they become second nature. The core idea is to run your power-hungry appliances either when your solar panels are covering the load or when grid electricity is at its absolute cheapest.

Here are a few real-world examples to get you started:

• Electric Vehicle (EV) Charging: It’s tempting to plug in your EV the moment you get home at 6 PM, but that's right in the middle of peak hours. A better move is to set a timer on your charger to kick on after 9 PM or even later, when off-peak rates make it much cheaper.

• Dishwasher and Laundry: Get into the rhythm of running the dishwasher right before you head to bed. You can also use the delay-start function on your washing machine to have it run in the middle of the day while the sun is out.

• Pool Pumps: If you have a pool, your pump is a major energy user. Schedule it to run during the sunniest part of the day, letting your solar system power it for free.

• Pre-Cooling Your Home: On scorching hot days, run your A/C a little harder in the early afternoon (an off-peak time) to get your house nice and cool. Then, you can raise the thermostat a few degrees during that pricey 4 PM to 9 PM peak window, staying comfortable without buying expensive grid power.

Adopting these simple routines means you pay less for any power you do need from the grid while getting the maximum value for the credits you send back. It's a powerful one-two punch that directly benefits your wallet.

To see how a custom solar system designed to beat TOU rates could work for your home, contact our solar services team for a personalized savings analysis. We can walk you through exactly how these strategies translate into real monthly savings.

Your Guide to the PG&E Interconnection Process

So, you’ve chosen your solar panels and are ready to start generating your own power. What’s next? The final, crucial step is getting your system officially connected to the grid. This is called the interconnection process, and while it might sound a bit bureaucratic, it’s really just a formal handshake between your new solar setup and PG&E.

Think of it as the process of getting your system registered and approved so you can start racking up those valuable NEM 2.0 credits. Getting this part right from the get-go is key to avoiding frustrating delays and getting your system turned on as quickly as possible.

The whole thing boils down to a pretty straightforward, three-step journey. Your solar installer and the utility work together to move from paperwork to power generation.

As you can see, it's a logical path from submitting your application to the final green light. Let's break down exactly what happens at each stage.

Step 1: Submitting the Interconnection Application

The first move is on your solar installer. They are responsible for putting together and submitting the complete Interconnection Application package to PG&E for you. This isn't just one form—it's a detailed technical file on your entire solar project.

This package needs to include a few key documents:

• Signed Interconnection Agreement: This is the core contract between you and PG&E that officially enrolls you in the net metering program.

• Single-Line Diagram (SLD): Basically, this is an electrical blueprint of your solar system. It shows how all the different components are wired together.

• Site Plan: A simple map showing where the panels and other major equipment will be located on your property.

• Proof of Insurance: A copy of your homeowner's insurance policy to verify you have standard coverage.

A complete and accurate application is absolutely non-negotiable. Even a tiny mistake or a missing document can get the whole thing kicked back, forcing your installer to start over and creating a major delay in getting your system turned on. This is one of those areas where having an experienced solar partner really pays off.

Step 2: PG&E Review and Approval

Once the application is in, it goes into PG&E's queue for a thorough review. Their engineers will pour over every document to make sure your system design is safe, up to code, and compatible with the local grid.

Why This Step Matters: This isn't just red tape. This detailed review is what protects the stability of the entire electrical grid. It ensures that the thousands of small, home-based power plants can all work together without causing flickers, surges, or other issues for you, your neighbors, or the utility's equipment.

California has been managing this for a long time. The state's original net metering caps from 1998 were tiny, but they’ve had to expand them dramatically to keep up with the explosion in solar adoption. Policies have been constantly updated to ensure utilities like PG&E can maintain a reliable grid while welcoming all this new clean energy. This history of careful grid management is why the interconnection process is so important.

Step 3: Receiving Permission to Operate (PTO)

This is the moment everyone's been waiting for. After PG&E gives the final stamp of approval on your application, they issue the most important document of all: the Permission to Operate (PTO).

The PTO is the official green light from the utility. It certifies that your system has met all requirements and is formally authorized to be switched on and start sending power back to the grid.

As soon as that PTO is in hand, your installer can come out, do the final commissioning, and flip the switch. From that moment forward, every extra kilowatt-hour your panels produce starts earning you those NEM 2.0 credits, and your journey toward energy savings truly begins.

The interconnection process might seem like a lot to handle, but it’s a burden you shouldn’t have to carry. Our team handles every form, diagram, and submission for you. When you choose our expert solar services, we manage the entire process flawlessly, getting your system approved and activated without any of the hassle.

Common Questions About PG&E Net Metering

Even after we've walked through the fundamentals of PG&E's net metering, it’s completely normal to have a few more questions pop up. Let's be honest, this is a major financial decision, and getting a handle on the finer points is what gives you real confidence in your solar investment.

So, let's dive into some of the most common things California homeowners ask us. We'll give you clear, straight-up answers to help you see the path forward.

What Happens If I Produce More Energy Than I Use in a Year?

This is a fantastic question because it gets right to the heart of how a solar system should be sized. At the end of your 12-month billing cycle, PG&E does something called an "annual true-up," which is basically a final tally of your energy credits and debits for the entire year.

If it turns out your solar panels generated a net surplus of energy over those 12 months, that value isn't lost. PG&E pays you for that extra power at the Net Surplus Compensation (NSC) rate.

Here's the catch, though: the NSC rate is based on wholesale electricity prices. This is a much lower rate than the full retail price credits you earn month-to-month. Think of it this way: your monthly credits are like dollars, while the NSC payment at the end of the year is more like dimes on the dollar.

The smartest strategy isn't to build a massive system that overproduces by a wide margin. The real goal is to size your system to precisely match what your home uses annually, maximizing the value you get from those high-value, retail-rate credits all year long.

An expertly designed system aims to get your net energy usage as close to zero as possible over 12 months. This is how you tune your solar investment for the absolute best financial return, not for selling cheap power back to the utility. We can help you find that perfect balance; just reach out to our solar services team.

Do I Still Get a PG&E Bill with Solar Panels?

Yes, you'll always receive a monthly statement from PG&E, but it's going to look radically different from what you're used to. Think of it less as a big bill and more of a monthly progress report on your energy account.

While your solar credits will often wipe out your energy usage charges—and sometimes even leave you with a credit balance—you are still connected to the grid. Because of that, there are a few minimum monthly charges you’ll still be responsible for. These typically include:

• A basic connection fee: This is a small, fixed charge, usually around $10-$15 per month, just for being tied into PG&E's infrastructure.

• Non-Bypassable Charges (NBCs): As we covered earlier, these are tiny per-kilowatt-hour fees applied to any energy you do happen to pull from the grid.

Just think of it as a minimal service fee for having the entire California electrical grid as your 24/7 backup generator. It's a tiny price to pay for the reliability and peace of mind that brings. For most solar homeowners, this new, much smaller bill is a very welcome sight. If you have questions about what your bill could look like, our solar services team can provide a detailed estimate.

How Long Does My NEM 2.0 Status Last?

This is easily one of the most powerful—and often misunderstood—perks of the whole program. Once your solar system gets its official Permission to Operate (PTO) from PG&E under the NEM 2.0 tariff, your spot in that program is "grandfathered" for 20 years from that date.

This 20-year guarantee is a core part of the agreement you enter into with the utility. It’s not just a temporary bonus; it's a long-term contract that gives you incredible financial stability. This protection locks you into the favorable NEM 2.0 rate structure for two full decades, insulating you from any future policy changes that might be less generous to solar owners.

This long-term security is a huge reason why so many people are moving forward with solar now. It's an opportunity to lock in today's rules for the next 20 years. In fact, when recent legislation (AB 942) threatened to retroactively shorten these 20-year contracts for 2 million California solar homeowners, powerful public action successfully defended the "grandfathering" clause, proving just how solid it is.

Knowing your investment is built on a stable, 20-year foundation provides real peace of mind. As a company with deep roots in California solar, you can learn more about our commitment to helping homeowners secure these long-term benefits on our about us page.

Can I Add More Solar Panels to My System Later?

This is a critical question, especially if you're planning for the future. The short answer is yes, you can add more panels later, but doing so comes with a major risk to your valuable NEM 2.0 status.

Here’s why: PG&E's rules state that if you expand your system's size by more than 1 kilowatt (kW) or 10% of its original capacity (whichever is greater), you could trigger a big change. PG&E could require your entire system—both the old and new panels—to be moved onto whatever net metering tariff is currently available for new customers.

Crucial Insight: This means a seemingly small expansion could force you to forfeit your grandfathered NEM 2.0 status and be pushed onto a potentially much less favorable program for the rest of your system's life.

This is precisely why thinking ahead is so important. Before you finalize your system design, really consider your future energy needs. Are you thinking about any of these possibilities?

• Buying an electric vehicle (EV) in the next few years

• Switching your gas furnace to an electric heat pump

• Adding a hot tub or a pool

• Expecting your family to grow

If any of these are on your radar, the safest and most effective approach is to size your solar system correctly from day one. By planning for that future usage now, you can install a system that meets your needs for decades to come and, most importantly, locks in your NEM 2.0 status for the full 20-year term without any risk. It's all about future-proofing your investment today to guarantee your savings for tomorrow. Don't leave it to chance—let our solar services experts design a future-proof system for you.