How rising electricity rates in San Diego make solar a smarter investment every year.
If you live in San Diego County, you already know SDG&E rates are among the highest in the United States. What you may not know is just how steeply they've climbed in the last decade — and how reliably they're projected to keep climbing. For solar, that's the single biggest variable in the long-term math.
What SDG&E Rates Have Done Since 2015
Average SDG&E residential rates have increased roughly 7% per year over the last decade — far above general inflation. Peak time-of-use rates have grown even faster, with some tiers now exceeding $0.55 per kWh during summer evening hours. For a typical San Diego household using 600 kWh per month, that's the difference between a $150 monthly bill in 2015 and a $300+ monthly bill in 2026.
Why Rates Keep Going Up
- Wildfire mitigation costs — undergrounding power lines and equipment upgrades
- Aging grid infrastructure that requires replacement and hardening
- Climate-driven shifts in generation and storage costs
- Regulatory cost-recovery mechanisms that pass utility expenses to ratepayers
What This Means for Solar Payback
When you compare your solar payback at today's rates versus rates 10 years from now, the math gets dramatically better. A system that offsets $3,000/year in electricity today will offset roughly $5,500/year in 2036 if rates continue their historical climb. Over a 25-year warranty period, the total avoided utility spend on a typical system easily exceeds $80,000 — and the system itself rarely costs more than $25,000 installed.
The lock-in effect
When you buy solar, you're locking in the cost of your electricity for 25 years. Whatever SDG&E charges in 2030, 2035, or 2040, your panels keep producing at the same fixed cost.
Time-of-Use Plans Make the Math Worse — Unless You Have Solar
SDG&E moved most residential customers to time-of-use (TOU) rate plans, where you pay more during evening peak hours (typically 4–9 PM) and less during off-peak hours. Without solar, you're at the mercy of those peak rates whenever you cook dinner or run AC. With solar + battery, you produce in the cheap midday hours, store the surplus, and discharge during peak — cutting your effective rate dramatically.
The Window to Lock in the Federal Tax Credit
The 26% federal Residential Clean Energy Credit applies through 2032, then steps down to 22% in 2033. Combined with rising utility rates, waiting another year or two costs you both: less in incentives, and more in avoided savings. The best time to install solar in San Diego was 2015. The second-best time is right now.
Bottom Line
SDG&E rate increases aren't going to stop, and waiting doesn't save you money — it costs you money. If you've been on the fence about solar, run the actual numbers for your home. Most San Diego homeowners are surprised by how quickly the math has shifted in favor of installing now.