Thinking about switching to solar in the Sacramento area? With electricity rates on the rise and the push for clean energy growing stronger, more homeowners are considering installing solar panels to save on their energy bills. But an essential factor often overlooked is how much credit you’ll receive for the excess power your home solar system sends back to the grid. In Northern California, the two major utility players—SMUD (Sacramento Municipal Utility District) and PG&E (Pacific Gas & Electric)—handle solar export credits very differently. Here’s what Sacramento-area homeowners need to know in 2024.
Understanding Solar Export Tariffs in California
Solar export tariffs determine how much you’re paid for the extra electricity your panels produce and send to your utility. These credits play a big role in your overall return on investment, influencing your solar payback period and long-term home energy savings.
SMUD Solar Export Tariffs: Simple and Predictable
How SMUD’s Net Energy Metering Has Changed
Historically, SMUD was known for its generous Net Energy Metering (NEM) policy, where solar customers earned the full retail value of each exported kilowatt-hour (kWh). However, as of 2024, new SMUD solar customers are offered a fixed solar export rate of roughly $0.076 per kWh. While this is lower than retail electricity rates (which can be over $0.13/kWh), the new rate is simple and stable, allowing for better planning. Predictability like this appeals to many residents in Sacramento, Elk Grove, Folsom, and Roseville.
What Does This Mean for Solar Owners?
If you’re a new SMUD solar user, you’ll see smaller credits on your bill for power exported to the grid starting this year. The benefit here is that the rate doesn’t fluctuate with the time of day or season—what you see is what you get. This stability makes budgeting easier, even if the financial incentive has declined.
PG&E Solar Export Tariffs: Variable and Lower Under NEM 3.0
PG&E’s Net Billing Tariff Explained
PG&E now operates under California’s NEM 3.0 (Net Billing Tariff), which offers variable export rates that change according to the hour, day, and season. In practice, most new solar customers receive anywhere from $0.05 to $0.08 per kWh for their exported power—the lowest rates typically occurring during midday when solar power is most abundant.
Impact on Solar Savings in PG&E Territory
For homeowners in PG&E’s coverage area around Greater Sacramento and the Central Valley, the variable nature of the NEM 3.0 export rates means that solar customers can earn less for excess production. The lower, fluctuating rates make it challenging to rely on solar exports for significant bill credits, especially without solar battery storage to shift energy use to evenings, when rates are higher.
SMUD vs. PG&E: The Cost Difference for Exporting Solar Energy
Side-by-Side Comparison
- SMUD: Fixed export rate (about $0.076/kWh), stable and predictable credits.
- PG&E: Variable export rates ($0.05–$0.08/kWh) based on time and season, with most credits at the lower end.
The takeaway? While both utilities have moved away from retail-rate net metering, SMUD’s export tariff is slightly higher and much more predictable than PG&E’s Net Billing Tariff. Homeowners in SMUD territory, covering much of Sacramento County, can generally expect a better return for exported solar energy compared to those in PG&E-served areas.
How to Maximize Home Energy Savings With Current Tariffs
Battery Storage: The Key to Beating Lower Export Credits
With both utilities offering reduced export rates, savvy homeowners are looking at ways to maximize self-consumption of their solar energy. Adding battery storage can help you use more of your solar power during the evening (when electricity rates are highest), which limits reliance on the grid and reduces exposure to lower export prices. This strategy is especially valuable for PG&E customers, whose credits for sending power to the grid are typically worth less than what they pay to buy electricity.
Optimizing Your Solar Investment
Your savings will also depend on the size of your solar panel system and how much electricity your household uses during daylight hours. Smart appliances, home automation, and shifting electricity use to the middle of the day can all contribute to better results under both SMUD and PG&E’s updated solar policies.
Conclusion: Which Utility Offers the Better Deal for Solar?
If you live in SMUD territory, you’ll enjoy a more straightforward—and generally higher—export rate for your solar energy compared to PG&E. However, the days of earning retail rates for exported electricity are gone, and both utilities now encourage maximizing self-consumption or adding battery storage for optimal savings. Understanding these export tariff differences is crucial for anyone thinking about solar panels in Sacramento, Elk Grove, Folsom, or surrounding cities. Ready to see which solar solution fits your home, or want a detailed tariff comparison for your address? Contact us today for a personalized consultation and start maximizing your home energy savings!
