Are you a Sacramento-area homeowner looking to cut electricity bills while making the most of California’s sunny days? Choosing solar energy makes sense—but navigating the maze of utility rates can be daunting. The Sacramento region is mainly served by two big utilities: SMUD (Sacramento Municipal Utility District) and PG&E (Pacific Gas & Electric). Their solar and storage rates have changed dramatically in recent years, and understanding how these affect your savings could be the difference between a good solar investment and a great one.
How SMUD’s Solar and Storage Rate Works
SMUD, a local public utility, has rolled out pricing options intended to support solar panels and battery storage. With the Solar and Storage Rate—sometimes referred to as the SolarShares program—you’re credited for energy you send back to the SMUD grid from your home solar system. However, this isn’t the same generous net metering you may have heard about in years past.
SMUD’s Compensation for Solar Customers
- Net Billing, Not Net Metering: Instead of a one-for-one credit, SMUD’s new rate offers a lower compensation for excess solar energy you export, aligning with the real-time value of that energy on the grid.
- Value of Battery Storage: If you add battery storage, you can store your solar energy during the day and use it during expensive peak demand hours (late afternoon and evening). This lets you buy as little electricity from SMUD as possible when rates are highest—boosting your home energy savings.
- Rates and Predictability: SMUD customers enjoy generally lower and more predictable Sacramento electricity rates, partly due to its muni structure. Grid fees and delivery charges are typically more affordable, and rate hikes, when they occur, are usually modest and publicly discussed.
PG&E’s Solar Tariffs: NEM 2.0 and NEM 3.0
PG&E covers much of Northern California, including suburbs like Roseville, Folsom, and Elk Grove. As of 2024, most new solar customers are subject to Net Energy Metering 3.0 (NEM 3, also called “net billing”), which has brought big changes.
What Changed with NEM 3.0?
- Reduced Export Credits: NEM 3.0 pays significantly lower credits for solar energy exported to the PG&E grid compared to the previous NEM 2.0 program. These credits are closely tied to “avoided cost,” making them far less lucrative.
- Time-of-Use (TOU) and Tiered Pricing: PG&E’s TOU rates mean electricity is most expensive during late afternoons and evenings—right when solar production drops. If you don’t have battery storage, you’ll buy more electricity at these peak rates.
- Monthly Fixed Fees: PG&E’s fees are higher than SMUD’s, and the overall bill can be hard to predict due to complex pricing.
Solar-Plus-Storage with PG&E
If you couple solar panels with battery storage, you can store daytime solar energy and use it in the evenings instead of buying expensive grid power. This makes battery storage nearly essential for new PG&E solar customers who want to maximize home energy savings.
SMUD vs. PG&E: Which Offers the Best Solar Value?
Homeowners in and around Sacramento often find SMUD’s rates to be significantly more affordable and the billing much more transparent. While neither utility offers the “old school” net metering benefits, both have adapted to promote solar-plus-storage setups.
Why SMUD Is Often Preferred
- Lower Base Rates: SMUD’s basic electricity rates per kWh are typically lower than PG&E’s.
- Stable and Local Control: SMUD’s decisions are made locally, and rate structures are generally more stable.
- Predictable Solar Credits: Even though the export rate is lower than before, SMUD’s formula is simpler and easier to plan around.
Where PG&E Has Advantages
- Wider Service Area: If you’re outside SMUD’s borders in Northern California, PG&E is likely your provider by default.
- NEM Grandfathering: Some legacy solar customers with NEM 1.0 or 2.0 contracts may keep their higher export rates for years.
Making the Most of Solar and Battery Storage in Northern California
Whether you’re choosing SMUD or PG&E, pairing solar panels with a home battery is the surest way to future-proof your savings. Not only does it allow you to avoid buying high-priced electricity during peak hours, but it also adds resilience—keeping your lights on during power outages.
Key Takeaways for Homeowners
- Assess Your Usage: The best rate depends on your home’s unique energy patterns—get a custom analysis.
- Invest in Storage: Battery storage boosts savings under both SMUD and PG&E, especially after recent tariff changes.
- Review Periodically: Utility policies change—so review your solar and storage setup every few years to capture the best value.
Ready to Compare Solar Savings in Sacramento?
No matter your utility provider, installing solar panels and battery storage can deliver real home energy savings—but the details matter. If you’re in Sacramento, Elk Grove, or surrounding areas, contact us today for a personalized solar and storage rate consultation. We’ll help you compare SMUD vs. PG&E options, design the right system, and maximize your savings potential under the latest net billing and time-of-use rates.
Ready to take control of your energy future? Let’s get started!
