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PG&E is ending their solar-friendly E7 rates. What should you do?

The Pacific Gas & Electric Company, otherwise known as PG&E, is one of California’s largest utility providers, serving most of the northern half of the state. For years, they’ve provided mutually-beneficial electricity rates for customers with solar on their roofs, whose panels helpfully produce most of the day’s electricity when demand is high. But because of changes in electricity usage patterns, the whole system is about to change.

The two rate schedules that have worked best for solar owners are called E6 and E7. Both are categorized as Time-of-Use (ToU) rate plans, under which electricity is more expensive at times when it’s being used more. The E6 rate plan charges customers higher prices for electricity used between the hours of 1 and 7 p.m., and the E7 plan, which was closed to new subscribers in 2008, has higher prices between noon and 6 p.m. Here’s how the ToU plan works:

Like we said above, rates under a ToU plan are highest during the afternoon, which is usually when solar panels are producing the most electricity. That means solar owners have been rewarded with big reductions in their bills, because their panels run their appliances for free, and when the sun goes down, the electricity they need is much cheaper. And if the panels produce more electricity than is needed to power the home, the utility credits the extra at the higher rates.

But the evening Netflix habits (among other energy use changes) of Californians have caused the times of peak usage to shift later in the day. That’s why PG&E has decided to do away with E7, and shift all current E7 customers to a new ToU plan called “TIME OF DAY RATE PLAN 3-8 p.m.,” or ETOU-A for short. As the name implies, electric rates under the new plan will reflect peak times from 3 to 8 p.m., and most solar panel owners will lose some of the savings they saw under the E7 plan.

That’s because solar panels have traditionally been installed on south-facing roofs, to take advantage of the sun at its peak. Under these new rate schedules, panels on a west-facing roof will do much better, because they’ll be at the optimum angle to catch the sun during the 3 to 8 p.m. timeframe. In fact, west-facing solar panels have been better under ToU plans for a while. Heck, even The New York Times weighed in on the promise of west-facing roofs back in 2014.

So what should you do if you’re about to get kicked off of E7?

Don’t panic

If you’ve got solar panels on a south-facing roof and you’re accustomed to the usage patterns under E7, your best bet is to switch to E6 before it’s no longer open to new subscribers on March 1st, 2016. That way, your panels will continue to produce power that will offset your bill when electricity is most expensive. The E6 rate schedule will operate through 2022.

If you’re reading this after March 1st, 2016, and you’re stuck on the new afternoon ToU plan, connect with your installer and ask about the possibility of getting your panels tilted westward. If that doesn’t work, you should hold off on electricity use until after 8 p.m.

If you haven’t installed solar yet, make sure to mention your desire for west-facing panels when you talk with an installer in your area. That way, if you end up on the 3 to 8 p.m. ToU plan, you’ll maximize your solar generation during the periods when electricity is most expensive.

Last modified: February 23, 2016

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Stephanie Ellis

We installed solar in 2014 and our provider did not explain the solar program very well and unfortunately we selected E-1. At this point would you recommend staying on that plan or switching to one of the new TOU plans? Thank you!

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