Solar resource
Your solar production in San Diego
5.82 avg peak sun hours/day
Monthly avg solar radiation (kWh/m²/day) — San Diego, CA. Bars update to show estimated kWh production when you use the calculator above.
Utility rate
San Diego Gas & Electric (SDG&E) electricity rate
$0.44/kWh residential
- Utility
- San Diego Gas & Electric (SDG&E)
- Residential rate
- $0.44/kWh (blended)
SDG&E is an investor-owned utility regulated by the California Public Utilities Commission (CPUC). As of April 15, 2023, new SDG&E solar customers are on NEM 3.0, also called the Net Billing Tariff (NBT). Under NEM 3.0/NBT, exported solar is credited at the 'avoided cost' rate — approximately $0.04–$0.08/kWh depending on time of export — rather than the retail rate. This is a fundamental shift from NEM 1.0/2.0 and means the economics of San Diego solar are driven primarily by self-consumption: every kWh of solar used directly in the home saves at the full retail rate (~$0.44/kWh), while excess energy exported to the grid earns far less. Battery storage pairs strongly with NEM 3.0 solar in SDG&E territory because it allows more solar production to be shifted to peak evening consumption (when SDG&E rates are highest), maximizing self-consumption value.
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Incentives
Available solar incentives in San Diego, CA
Federal + state + utility
| Incentive | Type | Value | Scope |
|---|---|---|---|
| Federal Solar Investment Tax Credit (ITC) | Tax Credit | 30% of system cost | Federal |
| California Property Tax Exclusion for Solar | Exemption | 100% of added assessed value from solar installation | State |
| SDG&E Net Billing Tariff (NEM 3.0) | Net Metering | Avoided-cost credit (~$0.04–$0.08/kWh) for exported solar energy | Utility |
| Self-Generation Incentive Program (SGIP) — Battery Storage | Rebate | $150–$1,000+ per kWh of battery capacity (income-qualified tiers higher) | State |
Incentive amounts and eligibility rules change. Verify current terms with your installer and a tax professional before installation.
System cost
Cost breakdown (6 kW default)
- Gross system cost
- $18600
- Federal ITC (30%)
- −$5580
- Net system cost
- $13,020
- Installed cost per watt
- $3.1/W
Lawrence Berkeley National Laboratory Tracking the Sun 2024 — California median installed cost for systems 3–10 kW. San Diego installed costs are near the California median; SDG&E's permit and inspection requirements plus CalGreen requirements are baked into this estimate. Note: the savings estimate reflects NEM 3.0/NBT economics — approximately 65% self-consumption at full retail and 35% export at avoided-cost rate (~$0.06/kWh blended).
Payback & long-term value
25-year outlook
- Annual savings (yr 1)
- $3,000
- Simple payback period
- 4.3 years
- 25-year net savings
- $57850
- Assumed annual rate increase
- 2.5%/year
25-year estimate uses flat electricity rate for conservative baseline. Accounting for 2.5% annual rate increases, lifetime savings increase substantially.
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How it works
How solar savings work in San Diego
- Your panels capture San Diego's exceptional year-round sunshine San Diego averages 5.82 peak sun hours per day — among the highest of any major coastal U.S. city. The mild Mediterranean climate and low marine layer inland means consistent, high-quality solar production year-round. A 6 kW standard roof-mount system at 20° tilt produces approximately 9,780 kWh per year — enough to cover a typical San Diego household's annual electricity consumption.
- Every kWh you use directly saves at SDG&E's high retail rate SDG&E has some of the highest residential electricity rates in the continental United States — approximately $0.44/kWh blended. Under NEM 3.0/NBT, self-consumed solar (energy used directly in the home) saves at the full retail rate. With a 6 kW system covering roughly 65% of a typical San Diego household's usage, the self-consumption savings alone drive most of the payback.
- NEM 3.0 means export value is much lower — self-consumption is the priority Under SDG&E's Net Billing Tariff (NEM 3.0), effective for new installations after April 15, 2023, excess solar exported to the grid earns the hourly avoided-cost rate — approximately $0.04–$0.08/kWh — not the retail rate. Right-sizing your system to cover your home's daytime load without large systematic over-export maximizes your savings. Battery storage paired with solar can shift excess midday production to high-rate evening hours.
- Battery storage amplifies NEM 3.0 solar value SDG&E's Time-of-Use rates charge the highest prices in the evening when solar panels are not producing. A battery like the Tesla Powerwall or Enphase IQ Battery stores excess midday solar production and discharges it during the 4–9 PM peak window, replacing expensive grid power and reducing what you export at the low NBT avoided-cost rate. California's SGIP rebate helps offset battery cost.
- You claim the 30% federal tax credit and state property tax exclusion On a $18,600 installed system, the federal ITC is $5,580 — reducing your net cost to $13,020. California's property tax exclusion (R&T §73) shields the value the solar system adds to your home from property tax reassessment through at least 2027, saving roughly $176–$242/year in property taxes.
- Savings compound as SDG&E rates continue rising SDG&E rates have historically increased approximately 2.5–4% per year. Because solar replaces expensive utility electricity, your savings compound as the retail rate rises while your installed cost stays fixed. A 6 kW system in San Diego nets approximately $57,850 over 25 years after recovering the installation cost — fast payback driven by SDG&E's high rate environment, even accounting for NEM 3.0's export penalty.
FAQ
Common solar savings questions for San Diego, CA
How much can I save with solar in San Diego?
A 6 kW system in San Diego produces approximately 9,780 kWh/year. Under SDG&E's NEM 3.0/NBT, savings are dominated by self-consumption at ~$0.44/kWh. Modeling approximately 65% self-consumption and 35% export at ~$0.06/kWh avoided cost, first-year savings are approximately $3,000. After the 30% federal ITC, net system cost is about $13,020, with a payback period of roughly 4.3 years and estimated 25-year net savings of $57,850.
What is NEM 3.0 and how does it affect San Diego solar?
NEM 3.0 (also called the Net Billing Tariff or NBT) is the California Public Utilities Commission rule for new solar installations connecting to SDG&E, PG&E, or SCE after April 15, 2023. Under NEM 3.0, excess solar exported to the grid is credited at the 'avoided cost' rate — approximately $0.04–$0.08/kWh — rather than the retail rate (~$0.44/kWh for SDG&E). This sharply reduces the value of over-sized systems designed to export most of their production. Systems sized for high self-consumption, or paired with battery storage, fare much better under NEM 3.0.
Is SDG&E's residential electricity rate really that high?
Yes. SDG&E consistently ranks among the most expensive residential utilities in the continental United States. The blended effective rate for a typical San Diego household is approximately $0.44/kWh — roughly double the national average. This high rate means every kWh of solar you consume directly in your home generates significant savings, creating a faster payback than in lower-rate markets even under NEM 3.0's reduced export value.
Should I add a battery with solar in San Diego?
Battery storage makes stronger financial sense in San Diego than in most U.S. cities, for two reasons: (1) SDG&E's Time-of-Use rates are highest in the 4–9 PM evening period when solar panels are not producing — a battery stores midday solar and discharges it during this expensive window; and (2) NEM 3.0's low export rate means unshifted excess solar generation is worth much less than self-consumed generation. California's SGIP rebate (approximately $150+/kWh for standard residential systems) helps offset battery cost. Income-qualified households may qualify for substantially higher SGIP rebates.
Does California have a property tax exemption for solar in San Diego?
Yes. California Revenue & Taxation Code §73 excludes the value a solar system adds to your home from property tax assessment through at least January 1, 2027. A 6 kW installation in San Diego typically adds $16,000–$22,000 to home value; at San Diego County's effective property tax rate (~1.1%), this saves approximately $176–$242/year in property taxes on top of the electricity bill savings.
How many solar panels does a San Diego home need?
San Diego homes typically use 450–700 kWh/month, significantly less than many mainland cities due to the mild Mediterranean climate (little heating demand, moderate air conditioning need). A 5–7 kW system — roughly 13–18 standard 380–400 W panels — typically covers 80–100% of annual usage. Under NEM 3.0, slightly undersizing is often preferable to avoid producing large amounts of low-value export energy.
Sources
Data sources and freshness
- https://pvwatts.nrel.gov/
- https://www.sdge.com/residential/pricing-rates/about-pricing-rates/tiered-pricing
- https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/demand-side-management/net-energy-metering/nem-revisit
- https://openei.org/apps/USURDB/
- https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC§ionNum=73
- https://www.selfgenca.com/
- https://emp.lbl.gov/tracking-the-sun
- https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics
- https://dsireusa.org/state/california/
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Disclaimer: This calculator provides estimates for informational purposes only — not financial or investment advice. Solar savings depend on actual shading, roof orientation, energy usage patterns, rate changes, and equipment performance. Consult a licensed installer and a tax professional before making purchasing decisions. Verify incentive eligibility with official sources. Data last verified 2026-04-19.