PG&E Solar: The New Reality
Pacific Gas & Electric (PG&E) serves 16 million people across Northern and Central California. In April 2023, California switched to NEM 3.0, dramatically changing the economics of solar. Here's what you need to know.
Export rate: $0.04-$0.08/kWh (vs. $0.30-$0.50 retail)
Required rate: Time-of-use (TOU)
Battery recommendation: Strongly recommended
Payback period: 6-9 years (with battery), 9-12 years (without) (Source: EnergySage market analysis)
The honest truth: Solar still makes sense with PG&E, but the strategy has completely changed. You can no longer export cheap midday power and get full retail credit. Now it's about self-consumption and avoiding expensive peak rates.
NEM 3.0 Explained (Net Billing Tariff)
What Changed from NEM 2.0
| Feature | NEM 2.0 (Old) | NEM 3.0 (Current) |
|---|---|---|
| Export credit | Full retail rate (~$0.30-$0.50) | Avoided cost (~$0.04-$0.08) |
| Credit reduction | None | ~75-80% lower than retail |
| Rate structure | Optional TOU | Mandatory TOU |
| Best strategy | Maximize exports | Maximize self-consumption |
| Battery value | Nice to have | Nearly essential |
| Payback period | 4-6 years | 6-9 years (with battery) |
How NEM 3.0 Export Credits Work
Under NEM 3.0, your export value depends on the time of day and month. The "Avoided Cost Calculator" determines rates that change hourly. Here are typical values:
| Time of Day | Export Value | Retail Rate | Your Loss |
|---|---|---|---|
| Morning (6-9 AM) | $0.05-$0.08/kWh | $0.35-$0.42/kWh | ~85% loss |
| Midday (9 AM-4 PM) | $0.03-$0.06/kWh | $0.35-$0.42/kWh | ~90% loss |
| Peak (4-9 PM) | $0.08-$0.15/kWh | $0.45-$0.60/kWh | ~80% loss |
| Off-peak (9 PM-6 AM) | $0.04-$0.06/kWh | $0.30-$0.35/kWh | ~85% loss |
PG&E Rate Schedules
Solar customers must choose a time-of-use rate. The right choice significantly impacts savings:
Common PG&E Solar Rates
| Rate | Peak Hours | Peak Rate | Off-Peak Rate | Best For |
|---|---|---|---|---|
| E-TOU-C | 4-9 PM | $0.45-$0.55/kWh | $0.35-$0.42/kWh | Most solar customers |
| E-TOU-D | 5-8 PM | $0.50-$0.60/kWh | $0.30-$0.38/kWh | Battery owners |
| EV2-A | 4-9 PM | $0.50-$0.58/kWh | $0.25-$0.30/kWh | EV owners with battery |
Note: PG&E rates increase almost every year. The rates above are approximations for 2026. Always check your actual rate on your PG&E bill.
Understanding Your Bill
PG&E bills have multiple components:
- Generation charge: The actual electricity (~60% of bill)
- Delivery charge: Grid maintenance and transmission (~30%)
- Fees and taxes: Various fixed charges (~10%)
- NEM charges: Solar customers pay a small interconnection fee
Why Batteries Are Essential for PG&E
Under NEM 3.0, batteries transform your solar economics:
Solar-Only vs. Solar + Battery
| Scenario | Solar Only | Solar + Battery |
|---|---|---|
| System cost (7kW) | $21,000 | $35,000 (with 13.5kWh battery) |
| Year 1 savings | $1,400-$1,800 | $2,200-$2,800 |
| Payback period | 10-12 years | 7-9 years |
| 25-year savings | $35,000-$45,000 | $55,000-$70,000 |
| Backup power | No | Yes (PSPS events) |
Best Batteries for PG&E Customers
- Tesla Powerwall 3: 13.5kWh, ~$12,000 installed, good app
- Enphase IQ Battery 5P: Scalable (5kWh modules), pairs with Enphase micros
- Franklin aPower: 13.6kWh, good value, whole-home backup capable
Realistic Savings for PG&E Customers
Here's what PG&E customers can actually expect to save with solar in 2026:
Scenario: Average PG&E Home
Assumptions: $250/month electric bill, 7kW solar system, E-TOU-C rate
| Configuration | Monthly Savings | Annual Savings | Payback |
|---|---|---|---|
| Solar only (cash) | $120-$150 | $1,440-$1,800 | 10-12 years |
| Solar + battery (cash) | $180-$220 | $2,160-$2,640 | 7-9 years |
| Solar (PPA/lease) | $50-$80 | $600-$960 | Immediate |
| Solar + battery (PPA) | $80-$120 | $960-$1,440 | Immediate |
Note: PPA/lease still gets the 30% federal credit (passed to you as lower rates), while cash/loan purchases no longer qualify since 25D expired.
Best Strategy for PG&E Customers
The Optimal PG&E Solar Setup
- Right-size your system: Aim for 80-100% of usage, not more (excess exports have low value)
- Add a battery: 10-15kWh minimum to capture peak savings
- Choose E-TOU-D or EV2-A: If you have a battery, these rates maximize arbitrage
- Shift usage: Run dishwasher, laundry, EV charging during midday solar production
- Monitor and optimize: Use your app to track production, consumption, and battery
What NOT to Do
- Don't oversize: A 15kW system when you need 7kW just creates low-value exports
- Don't skip the battery: The math almost always favors including storage
- Don't stay on E-1: The default flat rate is worse for solar than TOU
- Don't expect NEM 2.0 savings: Those days are gone
Frequently Asked Questions
Is solar still worth it with PG&E in 2026?
Yes, but the value proposition has changed. With a battery, payback is 7-9 years with 25-year savings of $55,000-$70,000. Without a battery, payback stretches to 10-12 years. Given PG&E's high rates and frequent outages, solar + storage still makes financial sense.
Can I still get NEM 2.0?
No. NEM 2.0 closed to new applications in April 2023. If you already have NEM 2.0, you're grandfathered for 20 years from your interconnection date.
Why are PG&E export rates so low?
California has so much solar that midday electricity is often worth very little (sometimes negative). The "avoided cost" methodology values your exports at what PG&E would have paid for wholesale power, which is much less than retail rates.
Should I wait for better policies?
Unlikely to improve. NEM 3.0 was a hard-fought compromise, and utilities continue pushing for even lower solar compensation. Going solar now locks in current rates and starts your savings clock. Waiting rarely pays off.
What about PSPS shutoffs?
PG&E's Public Safety Power Shutoffs are a major reason to add a battery. During shutoffs (common in fire season), solar-only systems turn off for safety. A battery keeps your critical loads running. With 5+ shutoffs per year in many areas, this alone justifies storage.
Questions About PG&E Solar?
NEM 3.0 is complicated. Ask our AI about your specific situation—rate schedules, battery sizing, or anything else.
Ask About PG&E Solar