How SCE customers can save money with solar panels

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Find out everything you need to know about going solar with SCE, including how much money you stand to save.

Southern California Edison (SCE) serves about 15 million people across 50,000 square miles of Southern California. If you’re a customer of SCE, you know electricity isn’t cheap. You’ve probably also noticed how many of your neighbors are turning to rooftop solar power to reduce those high electric bills. 

Are you ready to see if solar can work for you, too?

The average homeowner in SCE has an average monthly electricity bill of $200. That’s $2,400 per year. Adding solar panels to your home can reduce that expense by a ton, and the energy bill savings will pay off the upfront cost of solar in just over five and a half years

If you’re interested in solar panels for your home, your first step is to learn as much as you can. Below, we’ll cover all you need to know about going solar with SCE. We’ll discuss solar panel cost, savings, incentives, and batteries, too.

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    The cost of solar in Southern California

    The average cost of solar in California is about $3 per watt of electricity generation for a typical home system. To offset all their needs, a homeowner living in Southern California with an average monthly bill of $200 would need a solar installation capable of generating 4.6 kilowatts (kW) under full sun. 

    Take 4,600 watts times $3 per watt, and the average solar system for a home in SCE territory would cost $13,800, before the federal solar tax credit, and about $10,200 after the tax credit.

    Here are the average costs for various system sizes:

    Average monthly bill System size Cost
    $200 4.6 kW $13,800
    $250 5.8 kW $17,400
    $300 6.9 kW $20,700

    California is a mature solar market with lots of companies competing for your dollars, so you can usually find a range of prices from multiple installers that each use different brands of solar panels and equipment. Going with the cheapest offer isn’t always the best choice because installation companies differ in experience, product quality, and warranty offers. 

    Your best bet is to compare multiple offers from different local solar companies and make sure you ask the solar salesperson all the right questions before choosing.

    See what local solar installers are charging in your area

    Is solar worth it for SCE customers?

    The short, easy answer to the question above is YES. The average homeowner in SCE territory can save an estimated $48,000 over 25 years, AFTER they pay back their initial cost

    The average 4.6 kW system we used as an example above would pay back its cost in about 5 years, 7 months. After it’s paid off, the solar panels would continue to make clean energy to power the home for 20 more years—under warranty—saving the homeowner an estimated $48,000 along the way. 

    That’s a great deal! And if your average bill is higher than $200, you use more energy than most people do in a month, and could stand to save even more with solar. 

    For more in-depth information on all-things solar in the Golden State, check out our 2021 California Solar Panel Guide.

    The steps to go solar in SCE territory

    When you install solar panels on a home in SCE territory, these are the steps you follow:

    • Get an estimate of how many solar panels you’ll need based on your average bill
    • Ask local solar installation companies for quotes for your home
    • Evaluate the quotes, read reviews of solar companies, and pick the best one
    • Your solar installer designs your system and applies for permits to construct it and connect it to the grid (also known as ‘interconnection’)
    • The solar company receives permission to install the solar panels and completes the installation
    • A local inspector and SCE electrician come to your home to inspect the installation
    • When everything passes inspection, SCE grants permission to operate (PTO), and you can flip the switch on your system to begin generating electricity

    The first thing to do is estimate how much solar you’ll need and get quotes from installers. SolarReviews makes that easy with our solar calculator below. The calculator can give you an idea of the size system you need and an estimate of the cost and savings for your specific home. Once you have those numbers, you can request live quotes from installers in your area - if you wish. 

    Find out how much a solar system would cost for your specific home

    Length of the solar installation process 

    The whole process usually takes between 3-4 months to complete, as long as everything goes according to plan. 

    The actual installation will take 1-2 days with workers on your roof and installing other system components like the inverter and the main connection to your home’s electrical panel. Once you’ve gotten permission to operate, simply turn your system on and start saving money! 

    Let’s discuss a bit about how that works:

    How solar saves you money

    Solar panels generate electricity during daylight hours. Some of the electricity is used to power the home, and some is sent to your neighbors via the grid. If you have a home solar battery, you could also store that excess power for use when the sun goes down or during a power outage.

    Adding solar panels to your home can reduce that bill by a lot - in fact, they can bring it down to the minimum connection charge of around $10.50, plus a couple dollars a month for what SCE calls ‘non-bypassable charges’. These represent the portion of your electricity charge that goes to important environmental and low-income assistance programs.

    In California, the electric company will buy back any solar energy that isn’t used to power the home at near the full retail electricity rate. This billing arrangement is called Net Energy Metering (NEM), and California is currently on its second version, NEM 2.0.

    SCE NEM 2.0 billing 

    NEM 2.0 is complicated, but it basically does 3 things: 

    • Switches you onto a Time of Use (TOU) rate plan
    • Guarantees that you’ll get energy bill credits when your panels generate excess energy
    • Tracks your net consumption or production of energy and charges you during one yearly period called the “True-Up” period

    SCE’s most popular Time of Use rate plan is called TOU-D-4-9PM-NEM2. Under this plan, electricity is more expensive during “peak times”, from 4-9 pm when most people use the most electricity, and is also more expensive during summer. Conversely, electricity is less expensive during all other “off-peak” times, and even cheaper in winter. 

    Current summer prices are about $.40 per kilowatt-hour (kWh) during summer peak hours and $.24/kWh during off-peak hours. Winter prices are about $.33/kWh during peak hours and $.23/kWh during off-peak times.

    How much does SCE pay for solar energy? 

    Solar customers in SCE territory are credited for the energy they send to the grid at the retail rate, minus about 2.5 cents/kWh in non-bypassable charges discussed above. The price they get credited depends on whether the energy was sent during peak or off-peak hours. This is why some homeowners install solar panels on their west-facing roofs, to capture more energy late in the day, in order to offset high peak prices.

    Batteries can also be used to store solar energy during the day so you don’t have to use any energy during peak times. 

    Annual True-Up 

    SCE net metering runs for a period of 12 months; after which you’ll be billed based on your total net usage of the grid, or paid a credit based on the excess energy your solar panels produced above your usage. This means you only pay for energy once a year! In all other months, you’ll only have to pay the $10 or so connection charge.

    Every month, you’ll get a bill from SCE that details how much energy you used from the grid, how much your solar panels generated, and how much you owe or how much credit you have. The monthly statement will also include a True-Up update, that gives you an estimate of how much you will owe at the end of your 12-month billing period, as well as the date it will come due. 

    This could be a good thing - or a bad thing - depending on how you budget. For example, if you end up using a small amount of energy more than your solar panels make every month, you could end up with a pretty big bill at the end of your 12-month period. Make sure to size your system to meet all your needs throughout the year! The best way to ensure your system is sized correctly for your specific home is by working with a reputable installer that will help you gauge your monthly electricity usage.

    Check out SCE’s video below, which explains how to read your monthly bill and how the True-Up statement works. If you don’t love paying for energy once a year, you can request a monthly True-Up, but you won’t get full credit if you generate lots of extra energy in one month.

    Important note: NEM 2.0 is going away soon! The California Public Utilities Commission (CPUC) is currently deliberating on changes to the NEM program, including decreased compensation for solar energy and new fees for solar owners. The CPUC will announce the design of NEM 3.0 in January, 2022. Start the process of going solar NOW if you want to make sure to get on NEM 2.0 and avoid the new changes that could greatly reduce the financial benefits of going solar in California

    Should you buy solar batteries?

    It’s important to note here that residential solar batteries have not reached the point where they pay back their cost like solar panels do. The difference between on and off-peak energy prices is relatively small, so the savings you can get by using stored solar energy from 4-9 pm usually aren’t enough to make the battery worth it by itself.

    What batteries are very good at is keeping important lights and appliances running in the event of a grid outage—something that’s been happening more often as SCE tries to prevent forest fires. In fact, SCE shut power off 16 times in 2020, including on Thanksgiving Day.

    The peace of mind that comes with knowing you have backup power if the grid goes down is invaluable for a lot of people. Read our guide to the best solar batteries to find out more about current solar batteries on the market.

    California has recognized how important energy storage can be, and now offers millions of dollars in statewide battery storage incentives under the Self-Generation Incentive Program (SGIP). Homeowners in SCE territory can now get rebates of between $.20 and $1.05 per watt-hour (Wh) of storage in a battery they buy for their home.

    To put that in perspective, the Tesla Powerwall home battery stores 13.5 kWh, and costs $10.500, before the rebate and federal tax credit, to install. The standard rebate for the Powerwall would be $2,700, and the federal tax credit would be $2,730, together reducing the cost of the battery by half. 

    The state offers additional rebates for residential customers who are low-income, have medical needs, or live in areas with high fire risk. These homeowners qualify for an “Equity Resiliency” rebate that would cover the whole cost of the battery. That’s worth it

    Find out what you can save monthly with solar panels
     - Author of Solar Reviews

    Ben Zientara

    Solar Policy Analyst and Researcher

    Ben is a writer, researcher, and data analysis expert who has worked for clients in the sustainability, public administration, and clean energy sectors.

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