From the San Diego Union Tribune, March 22, 2019
By ROB NIKOLEWSKI, WRITER
San Diego Gas & Electric is rolling out “time of use” rates that will eventually affect the monthly bills for about 750,000 of the utility’s residential customers. But will the switch affect the nearly 155,000 residential customers who have rooftop solar systems on their homes? Yes, but the full answer is complicated.
The vast majority of solar customers will eventually move to time of use rates but some have the option to stay on a more traditional tiered-rate structure that is considered more financially attractive than time of use — it all depends on how long ago they activated their rooftop solar systems. “It really varies on the residential side,” said Edward Randolph, the Energy Division Deputy Director for the California Public Utilities Commission, which has directed the state’s investor-owned utilities to adopt time of use rates, also known as TOU. “That’s why (solar customers) need to contact their utility to find out their exact circumstance.” And circumstances have been changing quickly, in California’s energy landscape. Many customers — those with solar installations as well as those without — had just gotten used to the latest iteration of tiered rates and adopting TOU means a transition to a different pricing plan.
Under tiered pricing, customers pay a set rate per kilowatt-hour for the electricity they consume. They pay more when their household exceeds a predetermined “baseline” allowance and if they use more than 400 percent of their baseline, they pay a “high usage charge” that is even higher. But under TOU, the day is broken into segments. And instead of one set price regardless of time, the price fluctuates depending on when demand peaks on the system. The most expensive time of the day is 4 p.m. to 9 p.m. — a time that coincides with people coming home from work and firing up their appliances. The distinction between tiered rates and time of use is an important one for rooftop solar customers to keep in mind.
Solar and the grid
Among the attributes of installing rooftop solar perhaps the biggest selling point is a billing mechanism called “net energy metering,” or NEM. Under net metering, when a rooftop solar system generates more energy than the homeowner is actually consuming, the customer can sell the excess energy back to utilities such as SDG&E via the grid at the retail rate and receive credits on their bills. Since the price of electricity on a tiered rate remains constant throughout the day, solar customers can count on the price of the excess electricity they generate also remaining constant. For example, if the tiered rate for a homeowner is, say, 25 cents a kilowatt-hour in the summer months, the homeowner will get credited at that rate when his or her system generates excess electricity. Under a TOU plan, though, prices shift during the course of the day — high during on-peak hours and low during off-peak. But your rooftop solar system is generating most of its electricity when the sun is shining and that’s when the lower off-peak prices are in effect. For example, under SDGE’s default TOU plan, the off-peak price during the summer months is 21 cents a kilowatt-hour. That’s 4 cents less than the tiered rate of 25 cents a kilowatt hour.
Although there are some exceptions, it’s generally accepted by solar experts that rooftop solar customers get a better deal under tiered rates than time of use. That’s because most rooftop solar generation throughout the day comes during low-priced periods and then the sun sets just as prices shoot to their highest levels. “Tiered rates are going to save a solar customer more money, no question about about it,” said Brad Heavner, the director of policy at the California Solar and Storage Association, the state’s largest solar trade group. But when changes were made to the state’s net metering rules in 2016 (called NEM 2.0), it included migrating residential solar customers to TOU. “Time of use is going to be a critical element in integrating renewable resources into the electric grid,” Randolph said. “That helps us make better use of the renewable energy after it’s generated.” The California Solar and Storage Association, acknowledges that TOU is a done deal. “Time of use squeezes the margin (for solar customers) but it’s necessary to sustain solar going forward,” Heavner said. “We want to be good citizens. We recognize that we need to adapt to a changing grid, so (TOU) is necessary and we’ll live with it.” There are some customers, though, that see TOU as preferable. Some opt for time of use because they own electric vehicles and they find it financially attractive to use their electricity to charge their vehicles during low-priced, off-peak hours (such as after 9 p.m.). SDG&E’s time of use rates for residential solar customers are the same as the TOU for residential customers without solar. State law says utilities cannot assign rates to solar customers that are higher than those for non-solar customers. Heavner said while TOU pricing is not as favorable as tiered rates for many, the difference is small enough to still entice customers who are considering solar to put panels on their roofs.
The great migration begins
Of the 154,148 residential NEM customers in SDG&Es’ service territory, about 24 percent of them are already on time of use. The remaining 76 percent are on tiered rates and will be contacted by the utility about the rollout to TOU. SDG&E’s strategy is similar to the much larger effort the utility has already started with non-solar customers — explaining the move from tiered rates to TOU and sending them emails and notices in the mail that explain pricing and options.The transition will come in phases. Some residential solar customers have already been contacted and the first group is expected to complete the change to TOU in April. Just like non-solar customers, NEM customers will be offered a default time of use plan by SDG&E (called TOU-DR1) that in addition to on-peak and off-peak periods also offers a “super off-peak” rate for some segments of time. And just as with customers without solar, NEM customers can also opt for another, simpler, plan that breaks the into just two periods — on-peak and off-peak. SDG&E officials expect the rollout to be complete by the spring of 2020.
But wait … there is a way to stay on tiered rates
There is, however, a way some existing solar customers can stay on tiered rates if they prefer. When the CPUC established the new NEM 2.0 rules, it allowed customers who installed solar under the original net metering policy to be “grandfathered” in for 20 years from their original enrollment date. For solar customers in the SDG&E service territory, the 20-year rule applies to those who activated their systems before June 29, 2016. Randolph said the commission instituted the 20-year rule as an issue of fairness to solar customers who invested in a solar installation on their homes — a purchase that can frequently run to $20,000 or more, depending on the size of the house. “When they installed the panels, they were looking at the financing and the payback of those panels based on the rate structure at the time,” Randolph said. “Ultimately, the commission made the policy determination that the most equitable way to treat those customers was to give them the option of staying on the old rate structure.” After the 20 years are up, customers must move to time of use rates. “If you’re a customer who installed solar a few years ago, you’re probably going to want to stay on those tiered rates and not get shifted over to TOU,” Heavner said.
But what if you installed solar on your home after June 29, 2016?
Here’s another part of the story that’s complicated. Customers who activated their rooftop solar systems between June 29, 2016 and March 30, 2018 were defaulted to standard, tiered rates rather than TOU. They can stay on tiered rates for now but eventually, they will migrate to time of use — either five years from the date their system activated or June 2021, whichever comes first. That was done because when the CPUC established NEM 2.0, SDG&E was going through its general rate case — the long and involved process in which the commission decides how much an investor-owned utility can collect from ratepayers in a three-year period. With TOU periods still in flux at the time, those customers were put on tiered rates with a five-year stipulation. All customers who installed rooftop solar after March 31, 2018, have been placed on time of use. What if you are considering installing solar on your rooftop? Once you pull the trigger and get your installation up and running, you will be placed into TOU rates. Commercial SDG&E solar customers are already on time of use pricing plans.
The battery storage fix?
The switch to TOU may lead some rooftop solar customers to make the financial investment in pairing their installations with battery storage systems.
With battery storage, homeowners can save up the energy generated by the sun during the day and then use it later, when the sun goes down and solar generation wanes — and, critically, during that 4 p.m. to 9 p.m. time period when the cost of electricity can be more than twice the price. For example, go back to SDG&E’s default time of use rates. The off-peak price when solar generation is surging is 21 cents a kilowatt-hour during the summer months. The on-peak price between 4 p.m. and 9 p.m. is 43 cents a kilowatt-hour. With a battery, a residential solar customer can use that electricity that was generated at 21 cents and run his or her appliances as soon as they get home from work, thus avoiding the 45-cent price between 4 and 9 p.m. Or, the customer with battery storage can save that solar generation that cost them 21 cents a kilowatt-hour during the day and send it back to the grid between 4 p.m. and 9 p.m. and get their credit at 45 cents per kilowatt-hour. “Batteries are much more attractive under TOU rates,” Heavner said. San Diego solar customers seem to agree. Residential SDG&E customers have paired batteries to their solar panels at roughly more than twice the rate seen in the service territories of Southern California Edison and PG&E. Battery storage can be pricey. In 2017, a typical solar battery storage system cost about $6,200 but after federal and California incentives, the figure can be reduced by about $4,000. However, the statewide rebate program for installing a home battery — called the Self-Generation Incentive Program, or SGIP — currently has a wait-list for customers in San Diego because the residential sector burned through the area’s allotted $6.9 million in April 2018. But additional funding is expected to come via the CPUC. “There’s a certain amount budgeted and they ran out of that money, but they’re putting more money back in so it’s still a good idea to go on a wait-list,” Heavner said.
What is time of use?
Unlike a tiered-rate structure in which customers move into higher pay bands as they use more electricity, under a time of use, or TOU system, customers pay different prices per kilowatt-hour depending on when they consume power.
How it works: The more electricity you use when the state’s power grid has less resources at its disposal, the more you pay. Conversely, if you use electricity when demand is relatively low and there are more sources available for grid operators to manage, you pay less.
Peak hours: Under TOU, the most expensive time of the day runs from 4 p.m. to 9 p.m. That’s when energy demand spikes, as customers come home from work and run their appliances and — especially in the summer — turn on their air conditioners. Conversely, “off-peak” segments are priced considerably lower because renewable sources like wind and solar in particular are surging at that time in the day.
Here’s an example: Under SDG&E’s default time of use plan, electricity during “on-peak” hours between 4 p.m. and 9 p.m. costs 43 cents per kilowatt-hour during the summer season (June 1 to Oct. 1). But outside those hours, the “off-peak” price drops to 21 cents per kwh. And during “super off-peak” hours, the price falls to 16 cents per kwh.
Why the move: The shift to time of use rates was initiated by the Legislature, which in 2013 passed Assembly Bill 327 to reform residential rates, and the California Public Utilities Commission, largely to help integrate more renewables into the electric grid. SDG&E rolls out its plan this year. Edison and PG&E will start in the fall of 2020 and are expected to finish by 2021.
Make this year the time you buy a home or the year you set yourself up to buy one. Maybe you’re currently a renter, or you’re in a home that no longer fits your lifestyle. Either way, we’re here to help you, using our home buyer’s action plan.
Start with your finances
What is your current financial situation? Is your savings plan sporadic or do you consistently set a portion of each paycheck aside for your future home?
Creating and sticking to a budget is the first step to saving more money. Even if you don’t think you currently have enough disposable income, with a little work it’s easier than you think to cut back on your expenses.
Take a look at what you’re currently spending and take note. Determine:
- What’s essential vs. non-essential
- What’s recurring vs. random/one-time
- What expenses are realistic vs. ones that could be replaced with cheaper options
Once you’ve identified what’s what when it comes to your spending habits, figure out which can be cut out completely and which can be scaled back. Create a new budget and then get creative in order to meet it.
Rent and car payments are going to be the same every month, but your grocery bills can be cut down by shopping at a grocery outlet or buying less to prevent waste. Switching to a new cell phone provider could cut down on your monthly costs. Instead of hitting the drive-through Starbucks on your way to work, make your own coffee at home, and pack your lunch while you’re at it. No, you don’t have to stop putting avocados on your salads. This is Southern California, after all!
With a few lifestyle changes, buying a Southern California home can be within your reach.
Hold on to your savings
Once you’ve spent a few months cutting back on non-essential expenses for a few months, take a look at how much you’ve been saving on average each month, and then start automatically saving that amount each month. This will eventually become your down payment.
Ask for assistance
Getting married? Having a baby? Celebrating your birthday? That means gifts for you!
Instead of asking for traditional gifts like kitchen appliances, extra baby clothes that will soon be outgrown, and birthday dinners, inform your friends and relatives of your decision to buy a home, and request that they help contribute to your savings instead of buying you things you don’t necessarily need.
Though it might seem like a strange request at first, lots of home buyers, especially first-time buyers, are following this technique in order to expedite their purchase. Plus, your friends and family should be rooting for you and be happy to lend a hand.
As your agent, we can help you determine your needs
First, answer these basic home buyer questions. They will not only help you understand what you need, but they will also help me as your agent.
- How soon do you want to be in your new home? Knowing this will help people who are assisting you to get on your timeline. These include your agent, loan officers, appraisers, escrow officers, and even the seller.
- Who is involved in the homebuying process other than yourself? They will be involved the whole way, even if it’s a family member who is assisting with your funds. The decision-makers need to be identified, so everyone is lined up and ready to be involved when necessary.
- Does anyone have a home they need to sell first in order for you to buy? If your parents or relatives don’t have a home to sell to help you buy, my next question is, have you gone through the pre-approval process yet? Or if paying cash, do you or your family have those funds ready to present to a seller when asked? You can’t make an offer without proof of funds.
- What’s your current living situation? Are you on a lease that you have to break, are you renting month to month, still living at home? It’s important to know so you can prepare for a move.
- Do you need a home that is recently renovated and already has all or most of the features you need? Or, are you willing to move into a home that needs some updates but is ultimately move-in ready?
Some buyers don’t want to have to put in any work once they move into their new home. But with tight inventory and competitive markets, sometimes you have to think outside the box. Finding a home in a desirable area and priced lower than your budget but doesn’t necessarily check all your boxes might be the way to go. Or, maybe you do find the home of our dreams but it’s just outside your target neighborhood. Either way, making small sacrifices can save you money or shorten your search time, so don’t discount options unless you’ve weighed all the pros and cons.
As your real estate agent we can show you options out there so you can determine which ones are right for you. You might end up with more options than you had before.
Prepare to enter the market
Once you’ve saved up enough for a down payment, there are a few steps to take before you jump right into the home search.
In today’s competitive market, it’s important to be fully prepared to make an offer on a home the second you find one you like. You’ll want to get pre-qualified, which basically means determining how much you can afford, and pre-approved, which means getting your mortgage loan amount approved.
We can walk you through the process and help you determine everything needed in order to proceed. We can educate you on things like when is the best time to buy a house, what escrow is and how it works, and when closing costs are due. Plus, we partner with trusted companies that will protect you every step of the way.
You’ll want to partner with a responsible mortgage lender, like HomeServices Lending, so you’re ready to make an offer quickly and confidently.
Find your perfect
Once you’re feeling confident about what your needs are, it’s time to start searching for and touring potential homes.
Remember that even if the perfect home you’ve envisioned doesn’t exist, the potential to buy and improve upon an existing home is one of the best advantages of owning your own home.
If you’re not in a rush to buy and nothing is catching your eye, waiting can mean more time to save money for your down payment–but it also can mean a fluctuating market. Keep an open dialogue with your agent so they know what your priorities are and what your ideal timeline is so they can keep an eye on the market and know how to advise you.
Every buyer is different
This action plan is designed to help you find your perfect home, but every buyer is different. If you know you’re not going to be ready to buy this year, if after following these steps you’re still not ready at the end of the year, following this plan will still get you that much closer.
Start today and you’ll thank yourself later.
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- Initial consultation with Chrissy & Steven to evaluate your needs
As professional real estate agents, we have extensive market knowledge and will work to find the right home for you. Once we establish your needs, we will provide guidance to financial institutions where you can obtain information in order to get the best financing available.
- Identify property to Buy
We will forward you homes based upon the criteria you establish. The more precise and direct you are, the more successful your search will be.
- Determine Seller’s motivation
Once you have found the home that you wish to purchase, we can assist with the necessary research to help you structure an effective offer.
- Write offer to purchase
We will draft the Purchase Agreement and advise you on protective contingencies, customary practices, and local regulations. At this time you will need to provide an “earnest money” deposit, usually from 1 to 3% of the purchase price (the deposit is not cashed until your offer has been accepted by the Seller).
- Presentation of offer
We will present your offer to the Seller and the Seller’s agent. The Seller has three options: they can accept your offer, counter your offer, or reject your offer.
- Seller’s response
We will review the Seller’s response with you and negotiate to reach a final agreement.
- Open Escrow
When the Purchase Agreement is accepted and signed by all parties, we will assist in opening escrow for you. At this time your earnest money will be deposited. The escrow will receive, hold and disburse all funds associated with your transaction.
- Contingency time period
This is the time allowed per your Purchase Agreement to obtain financing, perform inspections, and satisfy any other contingencies to which your purchase is subject. Typical contingencies include:
- Approval of the Seller’s Transfer Disclosure Statement
- Approval of the Preliminary Report from the Title Company
- Loan approval, including an appraisal of the property
- Physical inspections of the property
- Pest inspection and certification
- Homeowner’s insurance
We can help coordinate between your Insurance Agent and the Escrow Officer to make sure your policy is in effect at close of escrow.
- Down payment funds
You will need a Cashier’s Check or money transfer several days prior to the closing date of escrow.
- Close Escrow
When all of the conditions of the Purchase Agreement have been met, you will sign your loan documents and closing papers. You will deposit the balance of your down payment and closing costs to your lender will deposit the balance of the purchase price. The Deed will then be recorded at the County Recorder’s office and you will take ownership of your home.
Lenders and Mortgage Brokers
Keep in mind, throughout the process of being approved to purchase your new home, the mortgage company is considering lending you a sizable amount of money. They are going to be sure you qualify by documenting your income, assets, liabilities and credit. If you follow their direction, they will work to make the process as quick and smooth as possible.
- Avalon Mortgage – Heidi Davlie, 858-625-8533
- Cornerstone Home Lending – Rick Sidley, 858-722-9489
- HomeServices Lending – Gian Ceretto, 619-573-5778
- Sierra Pacific Mortgage - Phil Joseph, 619-507-3558
- Watermark Home Loans – Dean Brown, 858-774-0622
Questions to Ask When Interviewing Lenders
- How long have you been in the mortgage business?
- What sets you apart?
- Why do you do what you do?
- When are you available to clients? 8-5, etc.
- Why do you work for the firm you work for?
- What percentage of your business is purchase vs. Refinance?
- If I need a pre-approval on a weekend, will I be able to reach you?
- We work during the day and it is tough to talk during business hours, can we reach you in the evening when questions come up?
- Are you always available for my questions/concerns?
- Will you be my main point of contact until the loan closes? If not, will your assistant be available to answer my questions?
- How often will you communicate with us regarding the progress of our loan?
- Once I submit my application, how long will it take to get pre-approved and the final approval?
- Are the appraisers or appraisal management companies that you company uses local?
- How are the interest rates and origination points/credits related?
- How do I know which loan product is the best for me?
- When and how do you decide to lock the interest rate?
- When can I lift the loan contingency?
- Do you charge any origination, or discount fees/points?
- What are the total lender costs, excluding taxes, escrow and title, that I will be charged for this loan?
- How often do you close on time?
School Districts and Reviews
Before you buy, learn more about school districts and individual schools serving your neighborhood choices.
Poway/Rancho Bernardo/Carmel Mountain Ranch/Rancho Penasquitos
Del Sur/4s Ranch/Santa Luz/Torrey HighLands
Scripps Ranch/Mira Mesa
Carmel Valley/Solana Beach/Del Mar
School Info and Ratings
GreatSchools’ trusted ratings and school information help parents find the right school for their family and improve schools in their communities. The thousands of articles, tips and interactive tools help parents support their child’s learning and wellbeing every day. Families, community leaders and policy-makers turn to GreatSchools for the school information they need to guide children to great futures.
More than any other single factor, when you buy a home in a good location, it’s usually a solid long-term investment.
- First impressions are lasting. Make sure it is fresh and clean.
- Let the sun shine in by opening draperies.
- Can you see the light? Turn on all your lights for an evening inspection.
- Repairs can make a big difference. Have them fixed.
- Remove all unnecessary articles. Avoid cluttered appearances.
- Decorate for a quick sale. Faded walls and worn woodwork reduce appeal.
- Make closets look bigger. Neat, well-ordered closets show space is ample.
- Arrange bedrooms neatly. Remove excess furniture.
- Bathrooms help sell homes. Check and repair caulking in bathtubs and showers. Make this room sparkle.
- Fix that faucet! Dripping water discolors sinks and suggests faulty plumbing.
- Three’s a crowd. Avoid having too many people present during inspections.
- Silence is golden. Be courteous but don’t force conversation with the potential buyer.
- Turn off the blaring radio or television. Let the agent and buyer talk, free of disturbances.
- Pets underfoot? Keep them out of the way – preferably out of the house.
- Be it ever so humble. Never apologize for the appearance of your home. Let the trained salesperson answer any objections.
- Be in the background. The salesperson knows the buyer’s requirements and can better emphasize the features of your home.
- Let your us discuss price terms, possession and other factors with the buyer.
- Show your home to prospective customers only by appointment through Chrissy & Steven.
Many of you ask me about what improvements they should make before preparing to list their home. This is truly your decision and we are here to help guide you through the options. As a member of the California Association of Realtors, I just received access to this helpful infographic that I wanted to share. It shows the data behind the potential return on different home improvement projects. If you need any help deciding how to prep your home for sale, I hope you find this useful, and of course, I am here if you need me.