Why Are SDG&E Bills So High in San Diego?

You're Not Imagining It — SDG&E Bills Really Are That High

If you live in San Diego and your monthly electric bill makes you wince, you're not alone. SDG&E customers pay some of the highest residential electricity rates in the country — and the gap keeps widening.

The average SDG&E residential customer paid roughly 43.63 cents per kilowatt-hour in 2024, according to data compiled from the U.S. Energy Information Administration by the Protect Our Communities Foundation [1]. For context, the national average that same year was about 16.48 cents/kWh [2]. That means SDG&E residential rates were nearly 2.6 times the U.S. average.

And by early 2026, California's average had climbed to 33.35 cents/kWh — still well below what many SDG&E customers actually pay — while the national average reached 18.56 cents/kWh [3].

So if you're paying $150, $250, or even $400+ a month, it's not because you're doing something wrong. The structure of your bill makes high costs nearly unavoidable for a typical San Diego household.

Let's break down why.

1. SDG&E Has the Highest Residential Rates in the Contiguous U.S.

This isn't hyperbole. Among major U.S. utilities, SDG&E consistently ranks at or near the top for residential rates. The Protect Our Communities Foundation, citing EIA data, reports that SDG&E's average residential rate reached 43.63 cents/kWh in 2024 — the highest of any utility in the contiguous United States [1].

Those same rates increased 133.74% from 2014 to 2024 [1] — more than doubling in a decade.

For a household using 500 kWh per month, that rate difference can add up fast compared with a home using the same amount of electricity in a lower-cost state.

2. Your Bill Is More Than Just the Electricity You Use

One of the most frustrating things about an SDG&E bill is how little of it is actually about the electricity you consume.

SDG&E's own AB3264 rate breakout (effective January 1, 2026) shows how a typical residential bill is divided [4]:

Key takeaway: Only about a third of a typical bill is the cost of generating electricity. The rest is tied to delivery, transmission, public programs, surcharges, and credits. Some parts vary with usage and some are harder to avoid, which is why lowering your bill is not as simple as just using a little less power.

The NEM Cost-Shift Disclosure

SDG&E's AB3264 filing discloses that Net Energy Metering (NEM) program costs add roughly $40/month or about 21% to a typical non-solar customer's bill [4]. This is SDG&E's accounting of costs they say are shifted from solar customers to non-solar customers.

It's important to note: this figure comes from SDG&E's own regulatory filing. Whether this cost-shift is calculated fairly or represents the full picture is debated among energy policy advocates. We present it as SDG&E's disclosure, not as uncontested fact.

3. Time-of-Use Pricing Means You Pay More When You Need Power Most

If you're on a Time-of-Use (TOU) rate plan — and most SDG&E residential customers now are — when you use electricity matters almost as much as how much you use.

SDG&E's TOU schedule [5]:

Peak hours are exactly when most families are home: cooking dinner, running the AC, doing laundry, charging devices. According to SDG&E's TOU-DR1 tariff [6], summer peak rates are substantially higher than off-peak rates — often 2–3× more per kWh.

That means a household that uses most of its electricity between 4 and 9 PM may pay noticeably more than a household with the same total usage spread across lower-cost hours.

Practical tip: Shifting heavy usage (EV charging, dishwasher, laundry) to before 4 PM or after 9 PM can make a real difference. But for many families, that's simply not realistic — you run the AC when it's hot, and you cook dinner when you're home.

4. Wildfire Hardening and Grid Investments Are Passed Through to You

In December 2024, the California Public Utilities Commission (CPUC) authorized a $2.699 billion revenue requirement for SDG&E's General Rate Case — a 7.5% increase over 2023 levels [7].

The CPUC notes this translated to roughly +$4.38/month for a typical residential electric customer (about a 2.6% increase). Key investments driving these costs include:

• Undergrounding power lines to reduce wildfire ignition risk
• Covered conductor programs for fire-prone areas
• Grid hardening and vegetation management

Wildfire safety is important — no one disputes that. But the reality is that these infrastructure investments are funded through your rates. SDG&E doesn't absorb these costs; they pass them through to ratepayers.

The CPUC did reduce SDG&E's original request, which would have meant even higher bills. But the approved increase still adds to an already expensive bill.

5. Tiered and Baseline Rates Can Punish Higher Usage

SDG&E's standard residential rate schedule (Schedule DR) uses a tiered structure [8]. You get a baseline allowance at the lowest rate, and once you exceed it, each additional tier costs more per kWh.

For a household with higher-than-average usage — say, a family of four running AC through a San Diego summer — you can quickly land in Tier 2 or even Tier 3, where rates climb steeply. The more you use above baseline, the more you pay per unit.

This structure means your bill doesn't just go up linearly with usage. It accelerates.

6. Rates Have Been Rising for Years

SDG&E rates have more than doubled in ten years [1]. Each General Rate Case can add new infrastructure investments, and wildfire-related costs continue to be part of the conversation.

No one can guarantee what your bill will look like next year. But the recent trend has been clear: residential electricity in San Diego has become much more expensive over time.

So What Can You Actually Do?

Here's the honest picture: short of drastically cutting your electricity usage, your options for reducing an SDG&E bill are limited within the utility's rate structure. Shifting usage to off-peak hours helps, but it's not always practical, and it doesn't address the underlying rates.

Solar is one of the few things that can meaningfully offset what you pay — because you're generating your own electricity instead of buying it at those rates.

Read our full NEM 3.0 guide → to understand how the Net Billing Tariff affects your solar savings under the new rules.

But we want to be straightforward: solar savings depend heavily on your individual situation. Your rate plan, roof orientation, shading, usage patterns, and which solar program you choose all affect the numbers. There's no universal "you'll save X%" answer.

Want to See What Solar Could Look Like for Your Home?

Use our savings calculator to get a personalized estimate based on your actual usage and roof:

→ Estimate Your Solar Savings →

No commitment. Just an honest look at the numbers for your specific home.

What Changed with Net Metering (NEM 3.0)?

If you've been researching solar, you've probably heard about NEM 3.0 — officially the Net Billing Tariff, effective for interconnection applications filed on or after April 15, 2023 [9].

Under the new Net Billing Tariff, the credits you receive for exporting solar energy to the grid are generally lower than under the previous NEM 1.0 and 2.0 programs — especially during off-peak hours. This makes solar economics more dependent on self-consumption (using your own solar energy directly rather than exporting it).

What this means in practice:

• Self-consuming your solar (running appliances during the day when your panels are producing) is more valuable than exporting to the grid
• Battery storage can help by storing excess daytime production for use during peak evening hours
• The specific financial impact depends entirely on your usage patterns and rate plan

This isn't meant to scare you away from solar — it's meant to set realistic expectations. Solar can still provide significant savings for many San Diego homeowners, but the math looks different than it did a few years ago.

Quick Reference: Why Your SDG&E Bill Is So High

Ready to See What You Could Save?

Every home is different. The best way to know whether solar makes sense for you — and what your actual savings could look like — is to get a personalized assessment.

Book a free, no-pressure consultation with Free Solar Consultations:

• Call or text: (619) 396-7530
• Book online: Free Solar Consultation →

We'll look at your actual bill, your roof, and your usage — and give you an honest answer about whether solar makes financial sense for your home. No hard sell. No inflated promises. Just straight talk and real numbers.

Sources

1. Protect Our Communities Foundation — SDG&E Facts & Data: https://protectourcommunities.org/facts-on-sdge/

2. EIA — 2024 Average Residential Electricity Prices by State: https://www.eia.gov/electricity/annual/html/epa_02_10.html

3. EIA — Electric Power Monthly Table 5.6.A (March 2026): https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=table_5_06_a

4. SDG&E AB3264 Electric Residential Average Rate Breakout (1/1/2026): https://www.sdge.com/sites/default/files/2026-03/AB3264_Electric%201-1-2026.pdf

5. SDG&E Residential Pricing Plans & TOU Hours: https://www.sdge.com/residential/pricing-plans

6. SDG&E Schedule TOU-DR1 Total Rates Table (effective 2/1/2025): https://www.sdge.com/sites/default/files/regulatory/2-1-25%20Schedule%20TOU-DR1%20Total%20Rates%20Table.pdf

7. CPUC — Sempra/SDG&E General Rate Case Decision (Dec 19, 2024): https://www.cpuc.ca.gov/news-and-updates/all-news/cpuc-cuts-amount-requested-by-sempra-in-rate-case

8. SDG&E Schedule DR Total Rates Table (effective 2/1/2025): https://www.sdge.com/sites/default/files/regulatory/2-1-25%20Schedule%20DR%20Total%20Rates%20Table.pdf

9. CPUC Decision 22-12-056 — Net Billing Tariff (NEM 3.0): https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M500/K043/500043682.PDF

Free Solar Consultations helps San Diego homeowners understand their options and connect with trusted solar providers. We serve the entire SDG&E service territory. Call (619) 396-7530 or book your free consultation online.