SDG&E Just Changed Your Rate Schedule - Here's What Solar Customers Need to Know
As of May 1st, 2026, SDG&E expanded its weekday super off-peak hours to include 10 a.m. to 2 p.m. year-round. If you don't have solar, that's potentially good news — cheaper electricity during the middle of the day. But if you're a solar customer, especially one grandfathered into NEM 1.0 or NEM 2.0, this change has a direct impact on the value of the energy your system sends back to the grid.
Here's what happened, why it matters, and what you can do about it.
May 2026 | 6-minute read | SDG&E, TOU Rates, NEM, Solar Export Credits
What Changed on May 1st?
SDG&E restructured its Time-of-Use (TOU) rate schedule. The key change: the weekday window from 10 a.m. to 2 p.m. — which was previously classified as off-peak for most of the year — is now super off-peak every month.
Previously, that midday block was only super off-peak during March and April. For the other 10 months, it was off-peak. Now it's super off-peak all year long.
Here's why that distinction matters: super off-peak is SDG&E's cheapest rate tier. Under the TOU-DR1 plan (the most common residential schedule), the approximate rates break down like this:
- On-Peak (4 p.m.–9 p.m.): ~$0.69–$0.80/kWh
- Off-Peak (6–10 a.m. and 2–4 p.m.): ~$0.45–$0.48/kWh
- Super Off-Peak (12–6 a.m. and now 10 a.m.–2 p.m.): ~$0.34–$0.39/kWh
The gap between off-peak and super off-peak is roughly $0.09–$0.10 per kWh. That might not sound like much — but when it applies to every kilowatt-hour your solar system exports during peak production hours, it adds up fast.
Why This Hits Solar Customers Hardest
Here's the problem: 10 a.m. to 2 p.m. is exactly when rooftop solar systems produce the most energy. On a sunny day in San Diego, that four-hour window is when your panels are at or near maximum output — and it's also when your home is likely using the least electricity (especially if nobody's home during the day).
That means most of the excess energy your system generates — the energy that gets sent back to the grid — is being exported during the hours that just got reclassified to the cheapest rate tier.
For NEM 1.0 and NEM 2.0 customers, your export credits are based on the retail rate at the time of export. When that midday window drops from off-peak to super off-peak, every kilowatt-hour you send back during those hours is now worth roughly 9–10 cents less than it was on April 30th.
The Math: What This Actually Costs You
Let's put real numbers on it. Say your system exports an average of 15 kWh per day during the 10 a.m.–2 p.m. window (a reasonable estimate for a well-producing residential system in San Diego).
- Under the old rate: 15 kWh × ~$0.45/kWh = ~$6.75/day in export credits
- Under the new rate: 15 kWh × ~$0.36/kWh = ~$5.40/day in export credits
- Daily difference: ~$1.35
- Monthly difference: ~$40
- Annual difference: ~$490
That's roughly $490 per year in reduced export credit value — and that's a conservative estimate. Larger systems or homes with low daytime consumption could see an even bigger impact.
To be clear: your system isn't producing less energy. The sun hasn't changed. SDG&E simply decided that the energy you export during your system's most productive hours is now worth less.
NEM 1.0 and NEM 2.0 Customers: This Applies to You
If you're on NEM 1.0 or NEM 2.0, your export credits are tied directly to the retail TOU rate (minus non-bypassable charges of roughly $0.02–$0.03/kWh). When SDG&E moves that midday block to a lower rate tier, your credits drop automatically. There's no opt-out, no grandfathering on the TOU schedule itself — the NEM agreement protects your right to net metering, but the underlying rate that determines your credit value is set by SDG&E's tariff.
This is an important distinction that a lot of solar customers miss: your NEM tier is protected, but the rates within that tier are not fixed. They're set by SDG&E and approved by the CPUC, and they can — and do — change.
For customers on the DR-SES plan (the most common NEM 2.0 solar rate schedule), the summer total rate during 10 a.m.–2 p.m. dropped from approximately $0.45/kWh to approximately $0.36/kWh — a reduction of about 20%.
NEM 3.0 Customers: Different Mechanism, Same Direction
If you went solar after April 14, 2023, you're on NEM 3.0 (the Net Billing Tariff). Your export credits aren't based on retail rates — they're based on avoided-cost rates that average roughly $0.05–$0.08/kWh regardless of TOU period. So the super off-peak reclassification doesn't directly change your export credit value.
However, this rate change does affect the value of self-consumption — which is the primary savings lever under NEM 3.0. The electricity you use from your own panels during the 10 a.m.–2 p.m. window is now offsetting a cheaper rate than it was before. The savings per kWh of self-consumed solar during midday just dropped by about $0.09.
The takeaway for NEM 3.0 customers: battery storage becomes even more important. Storing midday solar and using it during on-peak hours (4–9 p.m.) maximizes the rate differential — and that differential just got wider.
EV-TOU-5 Customers: The Impact Is Even Bigger
If you're on the EV-TOU-5 rate plan — SDG&E's plan for households with electric vehicles — this change hits harder than on any other schedule, and it's worth understanding why.
EV-TOU-5 is unique among SDG&E's residential plans because it collapses both generation and delivery charges during super off-peak hours, producing dramatically lower rates during those windows. The summer super off-peak rate on EV-TOU-5 is approximately $0.13/kWh — compared to roughly $0.34–$0.39/kWh on TOU-DR1. That's the cheapest electricity on any standard residential plan.
The flip side is that on-peak rates are steep: approximately $0.80/kWh in summer. That creates a spread of roughly 67 cents per kWh between super off-peak and on-peak — nearly double the spread of any other SDG&E plan.
Here's why that matters for solar: before this change, when you exported solar during the 10 a.m.–2 p.m. window at off-peak rates, your export credits were significantly higher than the super off-peak floor. Now that those hours have been reclassified to super off-peak, your midday exports on EV-TOU-5 are being credited at roughly $0.13/kWh — a far steeper drop than the ~$0.09/kWh reduction TOU-DR1 customers see.
The silver lining? That same massive spread makes battery storage extraordinarily valuable on EV-TOU-5. Every kWh you store at midday (~$0.13) and discharge during on-peak hours (~$0.80) captures roughly $0.67 in rate arbitrage. No other plan comes close to that return on stored energy. If you're on EV-TOU-5 and don't have a battery yet, this rate change should move that conversation to the top of your list.
What You Can Do About It
This rate change is done — it's effective as of May 1st and applies automatically. But that doesn't mean you're powerless. Here are the practical steps worth considering:
- Add Battery Storage | This is the most impactful response — and especially compelling for EV-TOU-5 customers. A battery lets you store the solar energy you'd otherwise export during cheap midday hours and use it during on-peak hours (4–9 p.m.) when rates are highest. On TOU-DR1, the spread between super off-peak and on-peak is roughly $0.35–$0.45/kWh. On EV-TOU-5, it's closer to $0.67/kWh — that's the value a battery captures on every stored kilowatt-hour. With SGIP rebates still available for battery installations, the economics of adding storage just improved significantly.
- Shift Daytime Usage | If you can run high-consumption appliances — dishwasher, laundry, pool pump, EV charging — during the 10 a.m.–2 p.m. window, you consume your own solar instead of exporting it at the new lower rate. Every kWh you use directly is a kWh you don't have to buy back at peak prices later.
- Review Your Rate Plan | Not all TOU plans are affected equally. If you haven't reviewed your rate plan recently, it's worth checking whether a different SDG&E schedule better aligns with your solar production and usage patterns. The plans that include super off-peak hours — TOU-DR1, TOU-DR, TOU-DR-P, EV-TOU-5, DR-SES, and TOU-ELEC — are all affected, but the degree of impact varies.
- Get a System Review | If you're not sure how this change affects your specific system and usage profile, now is a good time to have someone look at your production data, your utility bills, and your rate plan together. An independent review can quantify the impact and identify whether adding storage or shifting your rate plan would recover the lost value.
The Bigger Picture
This rate change reflects a broader reality: as solar adoption increases, utilities are adjusting their rate structures to account for the midday surplus of solar energy on the grid. When everyone's panels are producing at the same time, the grid-level value of that energy drops — and the rates are starting to reflect it.
It's the same dynamic that drove the creation of NEM 3.0 in the first place: the grid doesn't need more energy at noon. It needs it at 6 p.m. Rate structures are increasingly designed to push generation and consumption into alignment — and that means batteries, demand shifting, and smarter system design are no longer optional add-ons. They're becoming essential to making solar economics work.
Final Take
SDG&E's super off-peak expansion is live. If you're a solar customer on NEM 1.0 or NEM 2.0, your midday export credits just dropped — by roughly 20% on TOU-DR1 and DR-SES, and even more steeply on EV-TOU-5 where the super off-peak rate is only ~$0.13/kWh. The change is automatic, and there's no opting out.
But there are concrete steps you can take — adding storage, shifting usage, or reviewing your rate plan — that can offset or even exceed the lost value. The key is understanding how your specific system is affected and making adjustments accordingly.
If you're an SDG&E solar customer and want to understand what this rate change means for your system, reach out to us. We'll review your production data, your rate plan, and your options — and help you get the most out of your solar investment in this new rate environment.
Boden Energy Solutions
A dedicated community member known for his extensive volunteer work throughout the town, Tyler founded Boden Energy Solutions with a clear mission: to empower homeowners with personalized solar solutions. Leveraging a decade of specialized experience in photovoltaic solar and energy storage, Tyler's approach goes beyond simple sales, prioritizing a consultative process that ensures clients understand and benefit from their investment.