Thinking about going solar in the Sacramento area? Whether you live in Elk Grove, Roseville, Folsom, or another Northern California community, understanding how local utility tariffs work is crucial. Solar policies are evolving fast, and as 2025 approaches, so do new pricing structures for homeowners and businesses considering solar panels, battery storage, and clean energy investments. The differences in solar rates between SMUD (Sacramento Municipal Utility District) and PG&E (Pacific Gas & Electric) can significantly impact your home energy savings. Here’s what you need to know before making a decision.
SMUD Solar Rates in 2025: Transparent and Predictable
SMUD has built a reputation for offering easy-to-understand solar tariffs. In 2025, SMUD continues supporting clean energy customers with two main programs: SolarShares and Net Energy Metering (NEM).
How SMUD Credits Solar Customers
SMUD solar customers receive bill credits when their solar panels generate surplus electricity and send it back to the grid. Unlike many utilities, SMUD’s compensation is based on real-time wholesale electricity prices. This means the value of your exported solar energy aligns closely with broader market rates, keeping billing straightforward and transparent.
SMUD SolarShares Program
Don’t want to install panels yourself? The SolarShares program lets you buy into local solar projects and still benefit from solar credits on your SMUD bill. This flexible option is perfect for renters or those with shaded roofs around Sacramento.
PG&E Solar Rates in 2025: Adapting to NEM3 and Net Billing
PG&E has transitioned its solar customers to the Net Billing Tariff (NBT), also known as NEM 3.0, changing how you’re compensated for exported energy compared to traditional Net Metering mechanisms.
How Net Billing (NEM3) Affects PG&E Customers
Under NEM3, PG&E credits excess solar generation at a rate significantly lower than the retail electricity rate. These credits reflect the actual value to the grid, which fluctuates based on market prices and time-of-use periods. For most homeowners, this can result in lower bill savings compared to SMUD or earlier net metering programs.
Time-of-Use (TOU) Rates: Maximizing Your Solar Savings
PG&E’s time-of-use rates offer an opportunity for proactive customers. If you use most of your power during peak solar hours—when the value of exported energy is higher—you can optimize your savings. Combining solar panels with a battery storage solution enables you to store excess daytime energy and use it during high-cost evening periods, boosting the value of your solar installation.
Key Differences: SMUD vs. PG&E Solar Tariffs
- Tariff Structure: SMUD’s rates are generally more stable and easier to interpret, while PG&E’s net billing tariff makes compensation variable and often lower.
- Customer Impact: SMUD offers simpler monthly billing and less rate fluctuation, great for those wanting predictability. PG&E’s structure favors customers who can manage when and how they use electricity, or who add battery storage to their system.
- Solar Savings Potential: In 2025, SMUD customers are typically seeing higher overall returns from their solar panels versus similar-sized systems in PG&E’s territory due to the way exported energy is credited.
Example: Comparing SMUD and PG&E Billing
Consider a home in Sacramento and another in greater Stockton. With SMUD, if you export surplus solar during sunny afternoons, your credit is closely tied to live wholesale rates. With PG&E under NEM3, those same exported kilowatt-hours often earn much less, unless you combine solar with battery storage and shift usage to high-value periods.
What to Consider When Choosing a Solar Provider
Your choice between SMUD and PG&E solar rates in 2025 should consider several personal and home factors:
- Location: SMUD serves most core Sacramento communities, while PG&E covers larger portions of Northern and Central California. Check your precise utility provider before proceeding.
- Energy Usage: Homes that use more energy during daylight hours (when the solar is generating) reap higher solar savings. Battery storage can help shift your usage to match your panel output if you’re with PG&E.
- Ease & Predictability: If you value easy-to-understand bills and predictable returns, SMUD may be your better choice (if you have that option), while PG&E’s programs reward those who actively manage their energy consumption patterns.
Exploring Battery Storage: Is It Worth It?
Battery storage is increasingly popular in both SMUD and PG&E territories. SMUD customers benefit most from simple solar setups, but even more can be gained by storing cheap solar electricity and using it in the evening. For PG&E customers under NEM3, pairing solar with batteries is almost essential for recouping investment amid the new compensation structure.
Conclusion: Make the Most Informed Solar Choice in Sacramento and Beyond
Navigating SMUD and PG&E’s solar rates and tariffs in 2025 requires careful consideration of solar panel performance, local electricity rates, and your household’s energy habits. As California’s solar programs mature, the right choice can help you maximize home energy savings and contribute to a more sustainable grid.
Ready to compare your options or have questions about the latest solar rates in Sacramento, Elk Grove, Roseville, or Folsom? Contact us for a personalized consultation or a side-by-side analysis of SMUD and PG&E solar tariffs. Our expert team will help you design the best solar and battery storage solution for your home or business—so you get the most from clean, affordable energy.
