California Utilities' New Fixed Charges: What It Means for Solar Customers and Your Energy Bill
PG&E Bill
In a recent decision that’s been met with mixed reactions, California’s major investor-owned utilities (IOUs) – Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) – have announced a significant change to their pricing structure, with a new monthly fixed charge that will impact customers across the state. The move comes as part of the California Public Utilities Commission's (CPUC) efforts to balance the growing costs of grid maintenance and energy infrastructure. Let’s take a deeper dive into what this means for consumers and solar customers specifically.
The New Fixed Charge Structure
As of Q4 2025 for SCE and SDG&E, and Q1 2026 for PG&E, customers will see a new monthly charge on their energy bills, which will apply to all customers of the three large IOUs. Here’s a breakdown of the changes:
- $24.15 per month for all three large IOUs
This will be the standard fixed charge that applies to all residential customers, regardless of how much energy they consume.
- $6.00 per month for CARE customers
Low-income customers enrolled in California’s CARE (California Alternate Rates for Energy) program will pay a reduced rate for this new fixed charge.
- $12.08 per month for FERA customers
Customers enrolled in the FERA (Family Electric Rate Assistance) program, which serves middle-income households, will also receive a discounted rate.
While this monthly fixed charge may seem like a small increase at first glance, it can add up significantly over time, especially for customers who are currently benefiting from a more flexible pricing structure based on actual energy usage.
Impact on Solar Customers
For solar customers, this decision raises important considerations. Currently, many solar customers benefit from net metering, where they receive credits for the excess solar energy they produce and send back to the grid. This structure has been a key driver for people adopting solar energy, as it allows them to offset their electricity bills and make their investment in solar more financially viable.
However, with the new fixed charge, solar customers will likely see a shift in the way they are billed. The fixed charge means that regardless of how much energy they use or produce, they will still be required to pay this flat fee each month, which could make solar customers' bills less predictable. In essence, while you might still be saving money with your solar installation, your monthly utility charges won’t drop to zero as easily as before – even if you produce more energy than you consume.
Lower kWh Rates to Offset Increased Fixed Charges
In an attempt to balance the increased revenue from the new fixed charge, the utilities have agreed to lower their per-kWh rates. This means that the cost of electricity usage (based on the number of kilowatt-hours consumed) will decrease slightly:
- PG&E: 4.7 cents per kWh
- SCE: 4.6 cents per kWh
- SDG&E: 6.8 cents per kWh
For solar customers, this might offer a bit of relief on the energy side of the bill, as the cost per kWh will be reduced. However, the benefit might be overshadowed by the new fixed monthly charge, especially for those who rely on high energy usage and are accustomed to more variable costs.
What Does This Mean for the Future of Solar?
The introduction of a fixed charge is likely to prompt more discussions around how solar customers are compensated for their energy contributions to the grid. While the lower per-kWh rates may soften the blow, the increased fixed charge could discourage new solar installations for customers who were previously on the fence about making the jump. The unpredictability of utility bills, coupled with the loss of some savings from net metering, may make it harder for some people to justify the initial investment in solar.
However, for those who are already solar customers, this new fee could further highlight the importance of energy storage. With the ability to store excess energy in batteries like the Tesla Powerwall or other similar products, solar customers can reduce their dependence on the grid and avoid some of the impact of the new fixed charges. By maximizing self-consumption of solar energy, customers can reduce their grid reliance, keeping their utility bills lower despite the fixed charge.
While the rate adjustments by PG&E, SCE, and SDG&E are certainly a step toward addressing infrastructure needs and sustainability goals, they also underscore the need for more comprehensive solutions to incentivize clean energy adoption. With the fixed charge becoming the new norm, California residents and solar customers may need to rethink how they use and store energy to ensure they still benefit from their solar investments.
We recommend that solar customers consider evaluating their energy usage patterns and invest in home energy storage solutions if they haven't already. By doing so, you can continue to make the most of your solar system, even as the utility pricing structure evolves.
The new fixed charge proposed by PG&E, SCE, and SDG&E marks a significant shift in California’s energy landscape, and it’s a change that will impact all consumers, including those who have made the switch to solar. While lower per-kWh rates may provide some relief, the new fixed charge will likely make solar savings less predictable for many. As we head into 2025 and 2026, it’s more important than ever for solar customers to evaluate their energy needs, consider energy storage options, and stay informed about how these changes might affect their long-term energy costs.
If you're thinking about going solar or need to adjust your current system, now is a great time to talk to a professional who can help you navigate the upcoming changes and maximize the savings from your solar investment.
How to Build an ADU and Keep Your NEM 2.0 Solar Benefits: Our Recommendation
The rise in popularity of Accessory Dwelling Units (ADUs) in California is a trend that shows no signs of slowing down. Whether you're building an ADU for additional living space, a rental unit, or to house a family member, it’s important to understand how adding this new structure might impact your solar energy system, especially if you're currently taking advantage of **Net Energy Metering 2.0 (NEM 2.0).
NEM 2.0 is a key benefit for homeowners with solar systems, allowing them to earn credits for excess energy they send back to the grid. But when it comes to building an ADU, **adding a new unit with its own electrical meter could impact your solar savings and energy costs**. In this post, we’ll explore how NEM 2.0 works, why your ADU could affect it, and what we recommend to make sure you don’t lose your NEM 2.0 status
Understanding NEM 2.0: What It Means for Homeowners**
Net Energy Metering 2.0 (NEM 2.0) is a program offered by California utilities that allows solar homeowners to receive credit for the excess electricity their solar panels generate and send back to the grid.
-How it works: During the day, when your solar system generates more energy than you use, the excess power flows back into the grid, and you earn credits. At night, when your panels aren’t generating energy, you draw power from the grid, and those credits are used to offset your energy consumption.
- Why it’s valuable: Under NEM 2.0, you receive credits at the full retail rate for the energy your solar panels produce. This helps lower your electric bills, and over time, can significantly reduce the overall cost of your solar system.
However, if you're considering building an ADU, there are a few things to keep in mind regarding your solar energy system.
The Challenge: ADUs and Their Impact on NEM 2.0
Adding an ADU to your property means you’re adding another living space that will require its own energy usage. If your ADU is connected to the same electrical meter as your primary home, it will increase your overall energy demand. But here's the catch: If the ADU uses more power than your solar system is generating, you could lose some of the benefits of NEM 2.0.
When you add a new structure to your property, like an ADU, the utility companies may view the ADU’s energy consumption as part of your home’s total energy usage. This can create several complications:
1. Higher Energy Usage: The ADU’s additional energy consumption could push your home’s total usage above the amount your solar panels are generating. While you’ll still receive credits for the excess energy you generate, if the ADU uses more power than your panels can produce, you might need to buy more electricity from the grid.
2. Potential Impact on NEM 2.0: In some cases, if the ADU is not separately metered and is drawing power from the same meter as your primary residence, the utility may recalculate how your system’s credits and charges are applied. This could cause you to lose some of your NEM 2.0 benefits, especially if your total energy usage increases beyond what your solar system can offset.
Our Recommendation: Put the ADU on a Separate Meter
To ensure you don’t lose your NEM 2.0 status when building an ADU, we recommend installing a separate meter for the ADU. Here’s why:
- Separate Billing: If your ADU is on a separate meter, its energy consumption will be tracked separately from your primary home. This means the electricity used by your ADU won't count against the solar energy credits generated by your existing system.
- Retain Your NEM 2.0 Benefits: By keeping the ADU on a separate meter, your primary home’s energy consumption—and the amount of energy it sends back to the grid—will remain independent. You can continue to earn full credits for the energy your solar panels produce, without the ADU’s energy usage affecting your NEM 2.0 benefits.
- Flexibility: If the ADU is using a lot of energy (for example, if it has high-energy appliances, air conditioning, or electric heating), a separate meter allows you to manage each unit’s power use independently. This can help you avoid unexpected bills or disruptions to your solar energy credit balance.
Additional Benefits of a Separate Meter for Your ADU
Besides protecting your NEM 2.0 status, there are other financial and logistical advantages to putting the ADU on a separate meter:
- Clearer Energy Usage: You’ll have a more accurate picture of how much energy your ADU is using versus your primary home. This can help you assess whether the ADU is using more energy than expected and make adjustments (like adding more solar panels or improving energy efficiency) if needed.
-Future Flexibility: If you decide to rent out the ADU or sell your property, a separate meter can make it easier to track and allocate electricity costs, as well as create a clear distinction between the energy use of the primary home and the ADU.
Tax and Incentive Benefits: Depending on the energy programs available, a separate meter might help you qualify for certain incentives or tax credits related to the energy efficiency of your ADU.
Final Thoughts
Building an ADU is a fantastic way to add value to your home and increase living space, but it’s essential to keep an eye on how it impacts your solar energy system and your NEM 2.0 benefits. By installing a separate meter for the ADU, you can avoid complications with your solar credits and ensure that you continue to reap the rewards of your solar investment.
At Rooftop Solar, we specialize in helping homeowners maximize the benefits of their solar systems, whether they’re building an ADU or just looking to optimize their current setup. If you’re planning to build an ADU and want to ensure your solar system is set up for success, feel free to contact us. We’ll guide you through the process and help you protect your NEM 2.0 status while you add that extra space to your home.
Q1 2024 Solar Market Overview: A Record-Breaking Quarter and Its Impact on Homeowners
As we enter 2024, the U.S. solar market has made headlines with astonishing growth, installing 11.8 GW of solar capacity in the first quarter alone. This not only sets a record for the first quarter of any year but also marks the second-largest quarterly total in the history of the solar industry. At Unicorn Solar, we understand that homeowners facing high utility bills are particularly interested in how these developments can lead to long-term savings and energy independence.
Solar Power: A Solution to Rising Utility Costs
In Q1 2024, solar energy accounted for 75% of all newly added electricity-generating capacity in the U.S. This shift underscores how more and more homeowners are turning to solar as an effective solution to combat rising electricity costs. With solar panel systems, you can significantly reduce or even eliminate your monthly utility bills, making a proactive choice for your financial future.
Domestic Manufacturing Boost Promises Benefits
Another encouraging trend is the increase in domestic solar module manufacturing capacity, which rose to 26.6 GW in Q1 2024 from 15.6 GW in Q4 2023. This growth is essential as it signifies a move toward locally made solar solutions that can help ensure reliable supply chains and potentially lower costs for homeowners. As this capacity ramps up, you can expect a greater variety of affordable solar options available.
State Highlights: Where Homeowners Can Benefit
Florida and Texas emerged as leaders in solar installations during Q1 2024, with 2.7 GW and 2.6 GW installed, respectively. These states have made substantial investments in utility-scale solar projects that can help lower energy prices for residents. If you live in these regions, you have a unique opportunity to explore solar options that could reduce your reliance on traditional electricity sources.
Residential Sector Challenges and Opportunities
However, the residential solar segment faced challenges, with installations dropping to 1.3 GW—the lowest since Q1 2022. This decline is primarily due to regulatory changes, particularly in California, where shifts in net energy metering have led to confusion and hesitancy among homeowners. If you’ve been contemplating solar, now is the time to act as new regulations may impact future installations and financial incentives.
Robert Benedict shared his personal experience, highlighting how even solar users could see increased bills when not considering their entire utility strategy. This emphasizes the importance of making informed choices and potentially advocating for better pricing structures with local utilities.
Commercial and Community Solar: Options for Homeowners
While the commercial solar segment remained steady, with 434 MW installed in Q1 2024, and the community solar sector also matching last year's figures, both areas experienced a decline from Q4 2023. Homeowners interested in community solar arrangements can still find options that allow them to benefit from shared solar resources, even if they cannot install systems on their own properties.
Utility-Scale Solar: A Game-Changer for Energy Rates
Utility-scale solar installations soared to 9.8 GW in Q1 2024—the largest first quarter for this segment ever recorded. These large projects are critical in reducing energy costs for consumers, as they create economies of scale that can lead to lower electricity prices across the board. As these projects come online, it’s an excellent opportunity for homeowners to take advantage of lower rates driven by renewable energy growth.
Navigating Policy Changes for Homeowners
In recent months, the solar industry has faced various policy shifts, including increased tariffs on imported solar modules. While these changes may appear daunting, the overall outlook remains favorable for homeowners interested in solar. The market is expected to maintain a consistent installation pace, allowing for increased competition that can ultimately lower costs for consumers.
Looking Ahead: Your Path to Energy Savings
Despite the projected flat growth in the solar market over the next couple of years, there’s still a considerable opportunity for homeowners to transition to solar. As demand stabilizes and residential solar options become more diverse, now is the perfect time to explore how solar can offset your high utility bills.
By investing in solar energy, you not only take control of your energy costs but also contribute to a more sustainable future. Don’t wait for changes in the market or regulations—reach out to Unicorn Solar today. Our team is here to help you navigate your options, assess your unique needs, and empower you with the right solutions to make solar work for your home. Together, we can turn your high utility bills into energy savings and a brighter tomorrow.