sce new tou rates

Which SCE rate schedule is best for solar? Understanding peak hours

Reading Time: 6 minutes

Southern California Edison’s (SCE) new time-of-use (TOU) rate plans went into effect in March 2019, affecting the utility’s entire coverage area. Whether you have solar panels on your roof, are considering solar, or don’t have any plans to generate your own electricity, the time-of-use (TOU) rates will have an impact on your monthly electricity costs.

Currently, SCE customers have the option of switching over to TOU or remaining on their standard, existing rate schedule. However, TOU rates will eventually be the default for all residential customers of SCE. When it comes to choosing your TOU plan, the most favorable option depends on how much electricity you use and when you use it.

An overview of TOU rates

Today, most residential SCE customers are on a tiered rate plan. This means your per kilowatt hour (kWh) electricity rate is determined by how much electricity you use in a given month. When you use more electricity than the baseline allocation, you move up tier levels and have to pay a higher rate per kWh for that excess electricity. TOU rate plans are different: your per-kWh rate changes based on your total monthly electricity use and the time of day you use it.

There are specific times during the day when electricity is more expensive to generate – these are known as “peak” hours. When you draw electricity from the grid during peak hours, SCE charges you more for it. Alternatively, you can experience lower electricity rates if you consume energy during the specified “off-peak” hours.

What are the new SCE TOU rate plans?

Historically, SCE had six different TOU plans for their residential customers, allowing for flexibility in choosing your rate structure. This changed in 2019 when SCE implemented their new TOU rate plans, limiting the number of available TOU plans down to two primary offerings, plus one exclusively available to homeowners who have an electric vehicle. While some of the older TOU plans included peak hours that began as early as noon, the updated offers shift all peak hours past 4 PM. This means new solar customers will be generating most of their solar electricity in off-peak hours for a lower rate than what the alternative TOU rate plans allowed.

When will SCE implement new TOU rates?

The new TOU rate plans went into effect starting on March 1, 2019. If you’re a residential SCE customer without solar panels, you can opt into a TOU plan or remain on the standard, tiered electricity schedule. Alternatively, if you already have solar and were enrolled in an existing TOU plan, you’re grandfathered into that legacy plan for the time being. However, starting in October 2020, TOU rate plans will be the default for all residential customers of SCE, regardless of whether or not you have a solar panel system on your property. At this time, any existing solar customers in grandfathered TOU plans will need to opt into one of the current offerings.

Why are SCE’s TOU rates so high?

Utilities don’t use TOU rates to make more money off of their customers. Rather, TOU rates more accurately reflect how electricity prices vary throughout the day than fixed, per-kWh rates depict. During peak hours, electricity demand is high and thus more expensive for utilities to generate and deliver. Alternatively, during off-peak hours, demand for electricity is lower in your utility zone and therefore more affordable for SCE and, consequently, you as the end customer. TOU rates help encourage people to shift their electricity use away from costly peak hours.

There are a few steps you can take to reduce your bills when you’re on a TOU rate plan. SCE’s new rate schedules are still tiered and have peak hours from either 4-9 p.m. or 5-8 p.m. You can choose energy-efficient appliances and lighting to reduce your total monthly electricity use and remain in the least expensive “tier.” You can also save money by moving some of your electricity use to off-peak hours. Many electrical appliances such as dishwashers, washing machines, or dryers have scheduling functionality or “delayed start” features so that you can set them to run during off-peak hours ahead of time.

Select the right SCE rate plan based on peak hours

There are two primary TOU plans that SCE customers can choose from. The primary difference between each plan is where the peak hours fall: the TOU-D-4-9PM plan has peak hours from 4 to 9 p.m., while the TOU-D-5-8PM plan has peak hours from 5 to 8 p.m. Both of these plans have higher peak rates during the summer (June through September) than in the winter (October through May). You can find the most current prices for both plans on the SCE website. SCE also offers a rate plan comparison tool that will give you personalized evaluations of one TOU rate plan versus another based on your actual electric usage history.

TOU-D-4-9PM summer and winter pricing

TOU 4 to 9 summer rates
TOU 4 to 9 winter rates

TOU-D-5-8PM summer and winter pricing

TOU 5 to 8 summer rates
TOU 5 to 8 winter rates

TOU-D-PRIME for SCE customers with electric vehicles

TOU prime summer rates
TOU prime winter rates

If you have an electric vehicle, you can opt into the TOU-D-PRIME rates that offer a lower rate overnight. These TOU rates have a higher daily fixed charge compared to the other two options, but lower off-peak charges that will reduce the cost of charging your electric car during nighttime hours.

How do new SCE TOU rate changes affect your solar panel system?

Prior to the implementation of TOU rates, many solar installers in SCE territory would install a solar panel system that could offset enough of your electricity usage to remain in the lowest tier of electricity rates. However, the new rate schedules may change how you approach your solar savings.

When your solar panels produce excess electricity during the day, it’s sent back to the gird in exchange for net metering credits. Under SCE’s new TOU rate plans, most viable sun hours are during off-peak periods, meaning you’ll receive lower compensation for the kWh than if they were generated during peak hours. Your solar panels may not produce enough electricity to cover your usage during peak hours, resulting in a higher electricity bill.

TOU rates are one of the primary reasons many homeowners choose to install a battery with their solar panels. With a solar battery, you can store your excess solar electricity production at home instead of sending it back to the grid. Then, during peak hours when your solar panels aren’t producing electricity, you can draw from the battery instead of having to pay a higher rate to your utility.

California also has an incentive for storage, known as the Self-Generation Incentive Program (SGIP), that helps lower the costs of energy storage in the state. This program provides rebates to homeowners who install a battery with their solar panel system. However, if you aren’t ready to install a battery, your solar company can install a solar PV system for you now that will be ready for a battery addition at a later date.

Choosing the right SCE rate schedule is just one way to maximize your solar savings

Installing solar panels on your property is the best way to protect yourself from variable electricity prices, regardless of whether you’re on a TOU rate plan or not. You can compare multiple quotes from local, prescreened installers by joining the EnergySage Solar Marketplace. Upon registering, you’ll have the opportunity to upload your SCE electric bill so that installers can quote and design a solar panel system best suited for your needs.

zip code entry solar calculator
Find out what solar panels cost in your area in 2020

12 thoughts on “Which SCE rate schedule is best for solar? Understanding peak hours

  1. Gater Eby

    Brian, you’re correct!!! We just spent $35k out of pocket to install a solar panel system that would 100% cover our daily usage of electricity. The install was completed in December 2019/January 2020. I just paid it off and now Edison is changing their tier rate, which means if I’m not super super careful… After spending $35,000, I have to cough up more money for Edison. It’s been a nice six months where I didn’t actually have to pay monthly electric bill. But now that’s going to change because of the new time of use rates that they are forcing down everyone’s throat. I don’t care how they label it, this is about stockholder dividends and bottom line profits.

    Reply
  2. Cindy

    We live in the IE/Riverside County where it NEVER seems to cool off. Our last bill went into the 4th tier (as I understand it) for running the A/C when at home in the evening when not working. Needless to say we will have to pay this bill but we refuse to use our A/C any more as we are not going to give SCE all our money. SCE claims the increase is to fund upgrades and labor costs from 2021 to 2024 but I have no proof. Our usage is constantly compared to our adjoining neighbor who is a snow bird who is not here half the year which makes our use look worse. I think Edison is trying to make their profit margins look good for the stock holders. No utility should be allowed to sell stock and take on that mindset as they are providing something to stay alive. I just hope the IE starts to cool off soon.

    Reply
  3. abrokenviewfinder

    This is disgusting. I just got another – you’re above the “state mandated” 400%. No surprise, we’ve all been home since the middle of march. Just got a $700 SCE bill for a 1280 sq ft home. Central A/C, double paned windows, new roof, insulated. Now we’re back to work and back to school from home, it’s 105 degrees outside, and – 2PM-8PM in coming September, is the hottest time out here in the I.E. So that falls perfectly within their most expensive TOU tiers. What is our next bill going to be? If this was truly a “public utility” as they call it, you shouldn’t be able to buy a share. I wouldn’t even suggest CA trying to run these things and SCE did cop to burning down communities and the following mudslides. This is where our money goes. Lose, lose.

    Reply
  4. Brian

    Great article and comments. I was in the process of getting solar quotes and trying to research all I can about going solar. I heard about TOU and what I have been learning really puts me off of doing solar. How can the installers accurately estimate what my high tier usage will be in comparison to what the system is generating during the day. I’m afraid it won’t save as much on the bill as they are estimating and could push the payback period back to 10 years or who knows really. At that point, might as well buy Edison stock and get the 4.8% dividend each year.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *