PG&E and Solar

Understanding how (and why) PG&E Quietly Subsidizes Solar

Addendum: PG&E’s Climate Zones – Intro

Surprise! You and I pay the same rates, but one of us is getting more electricity at that cheap rate!

Yet another dimension of PG&E pricing is climate zones. It’s not covered in the prior article, because, unlike those three dimensions, the impact of climate zone pricing on the attractiveness of solar is unintentional. For some homes, being placed on the wrong side of a climate zone border will benefit them, reducing their need for solar. For others, being on the wrong side will mean that solar makes even more sense.

The issue here is the amount of electricity available at PG&E’s (relatively) low baseline rates. PG&E assigns customers to one of ten climate zones. While all customers on a given tariff pay the same rates, the zone determines the specific quantity of electricity available at your base rate.

PG&E’s stated objective is to be sure that homes in the Central Valley can afford air conditioning in the summer, and homes in the Sierra can afford heat in the winter. And since homes that use electricity to heat will need a higher base than those that have gas, there’s an adjustment in each zone for that too.

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