Understanding California's Solar Billing Plan
What is the Solar Billing Plan?
California’s Solar Billing Plan (also known as SBP, NEM 3.0, or Net Billing Tariff) is how major utilities (PG&E, SCE, SDG&E) bill and credit solar homeowners. It applies to utility solar applications submitted after April 14, 2023.
Why the Plan Exists
What the Plan Encourages
Maximizing the Value of your Solar Production
California’s SBP rate rules generally match the credit value of solar energy with how much it would cost the utility to produce it. This makes storing your excess solar energy for nighttime use far more valuable than sending it to the grid.
Buying Grid Energy
Selling to the Grid
Maximizing your Solar Energy
Your Battery's Typical Daily Rhythm under SBP
Your battery isn't just for blackouts—it's an everyday energy management tool. With active optimization technology, we program your battery so it automatically manages your discharge behavior without you needing to watch utility rates or the clock.
10 AM-3 PM
Your panels take the lead
Unused solar electricity fills up your battery. Because daytime utility export credits are low under the Solar Billing Plan, storing solar power for later use provides the most value.
4 PM - 9 PM
Your battery steps in
When utility rates are higher in the evening, your system uses the energy stored in your battery to meet your home’s demand and shield you from buying energy at peak utility prices.*
12 AM - 6 AM
Smart energy management
Your home uses your stored battery energy throughout the night, seamlessly switching to the grid once the battery(ies) are depleted, while always maintaining an emergency energy reserve for outages.
*In the summer months, batteries may also discharge to the grid. Learn more about summer battery behavior here.
Community rewards for grid support
Understanding Utility Billing Post-Solar
While installing solar and battery storage dramatically lowers your dependence on the utility grid, it is important to know that your utility bill will be reduced, not eliminated. Even with a robust solar setup, you will receive a monthly statement from your utility provider.
The first change you’ll experience with utility billing is a new electrification utility rate plan. Once your Sunrun system is activated, you will transition to a "Time-of-Use" rate structure specifically designed for homes with electrified homes (such as PG&E's E-ELEC, SCE's TOU-D-PRIME, or SDG&E's EV-TOU-5). Utility rates are broken into generation and delivery charges, with pricing for each component varying by time of day and season.
What’s Included in Your Monthly Utility Bill?
All customers still pay a small daily base service fee (about $25 per month) to remain safely connected to the grid.
These are minor, mandated per-kWh fees that fund public programs and wildfire safety funds. They apply to any energy you pull from the grid.
When you send solar to the grid, your utility will compensate you for that electricity. That will be broken down into generation (credit for producing it) and delivery (credit for 'shipping' it).
The utility will charge you for any electricity you pull from the grid. This will be broken down on your bill into generation (cost of them producing it) and delivery (cost of them getting it to you).
How Energy Credits and Charges Work
Your monthly utility bill divides electricity into two separate charges: Generation–producing the energy and delivery–transporting energy through grid infrastructure.
Under California's Solar Billing Plan, the credits you earn for exporting solar energy are categorized into these same two buckets:
Generation Credits: Earned when your panels produce excess energy that’s sent to the grid. These credits can only be used to offset the generation charges on your utility bill.
Delivery Credits: Earned based on the delivery value per kWh of sending energy to the grid. These credits offset the delivery charges associated with using grid power.
No Cross-Offsetting: Utility rules strictly prohibit applying generation credits toward delivery charges.
Why Your Bill Won't Be Zero
Even if your system generates 100% of the energy your home uses over the course of a year, often known as 100% offset, this doesn't mean that you will have 100% bill offset or daily energy offset.
Seasonal changes, such as fewer sun hours and stormier weather in the winter, and high-demand days, mean you will still use energy from the grid, and the cost of that grid energy depends on the time of day. So while your monthly utility bill still naturally fluctuates with the seasons, your overall annual energy costs are significantly more predictable and manageable because you have solar and a home battery.
What’s Included Annually in Your Utility Bill?
How your credits and charges balance out once a year
Understanding Annual True-up Statements
Every 12 months on your system’s "Permission to Operate" (PTO) anniversary, your utility includes an annual settlement, often called a true-up, in that month’s utility bill.
This annual review compares:
Your solar exports: Whether you sent more solar energy to the grid than you pulled from it over the year. If you exported more energy than you imported, you’re considered an “overproducer.”
Your credit balance: If you’re classified as an “overproducer,” the settlement will outline the adjusted value of your remaining solar credits rolling into your new solar billing year.
FAQs
Anytime you need to pull electricity from the grid, the utility will charge you for it. Producing more solar energy than you use doesn’t cancel out the amount of energy you use from the grid. The value of solar energy credits varies by time of day, and so does the cost of grid energy. You will see solar energy export credits as line items on your utility bill, split into generation and delivery lines, with their respective per-kWh values.
You can expect to use at least some electricity from the utility each month– even if you are overproducing. This is because when you produce and when you consume electricity don’t always line up. There are times of day when you will need more energy than your system is producing, at night, for example. This means you will need to pull energy from the utility to meet your needs, and that will show up as charges on your bill.
Because generation credits cannot offset delivery charges, some customers end up with a large amount of generation credits accumulated on their bill. These solar credits can be used to offset future generation charges, but cannot be applied to the delivery charges you see on your bill.
Daytime solar production creates an abundance of energy in California, making power generation relatively inexpensive during the middle of the day.
However, getting electricity delivered to homes during high-demand evening hours (4 PM–9 PM) requires significant utility infrastructure and grid management.
Because energy delivery is a much higher operational expense for utilities, your export credits are structured to give more value to the generation portion of your credits than to the delivery portion. This is because you’re helping the utility with the supply more than with the distribution.
After the settlement bill, any leftover financial credits are handled based on your utility provider:
PG&E: Remaining dollar credits roll over to the next 12-month cycle.
SCE & SDG&E: Remaining dollar credits are zeroed out (reset to $0) for the new year.
*SDG&E (understanding bill + true up), SCE (FAQ + understand bill), PG&E (guide)
If your settlement date is in the springtime, you may have fewer credits as you’re just coming off the winter season, when days are shorter and solar production is lower, and as a result, you tend to be using, instead of producing, solar export credits.
If your settlement date is in the fall, you’ll likely have a lot of credits because solar production is at its peak in the summer, and you’ll likely have an accumulation of credits after taking advantage of high-value summertime credits.
Making Smart Decisions to Minimize Your Utility Bill
We optimize your solar + battery setup to work with California's solar crediting rules. Matching daily energy habits to peak solar production hours helps make the most of your solar energy and keeps your remaining utility bill as low as possible.
Shift High-Load Appliances
Pre-Cool Your Home
