SDGE NEM: TOU-DR2 vs TOU-DR1 for solar customers
TOU-DR2 can be surprisingly attractive for some legacy SDGE solar customers because it has no super off-peak period. That sounds backwards until you remember that NEM exports are credits, not just consumption.
If you are consuming energy, cheaper midday pricing is good. If your solar is exporting energy under NEM 1 or NEM 2, cheaper midday pricing can reduce the value of the credit.
TOU-DR2 puts the solar-heavy midday window into off-peak instead of super off-peak. For export-heavy homes, that can improve the value of daytime exports while keeping the 4pm to 9pm peak signal.
The midday solar production window can land in super off-peak.
The same midday window is treated as off-peak, not super off-peak.
Why solar changes the math
A non-solar household usually wants the cheapest possible daytime consumption rate. A legacy NEM solar household may be a net exporter during the same hours, so the question flips: what rate is assigned to the exported kWh?
Lower rate is better because you are buying from the grid.
Higher applicable TOU value can be better because exported energy becomes a bill credit.
Peak imports still hurt. TOU-DR2 does not make 4pm to 9pm usage cheap.
NEM 1, NEM 2, and NEM 3 are not the same
TOU-DR2 is mostly a legacy NEM retail-credit discussion. NEM 3, formally the Net Billing Tariff or Solar Billing Plan, compensates exports differently.
| Solar tariff | Import plan rule | Export credit basis | TOU-DR2 takeaway |
|---|---|---|---|
| NEM 1.0 | Any eligible rate schedule | Retail/import rate before true-up | TOU-DR2 may help if midday exports would otherwise fall into a very cheap super off-peak period. |
| NEM 2.0 | Time-of-use rate required | Retail/import rate by metered interval before true-up | Often the cleanest case for testing TOU-DR2 against TOU-DR1, TOU-DR-SES, or TOU-ELEC. |
| NEM 3 / NBT / SBP | Specific electrification TOU rate | Avoided-cost export values, usually below retail, with some high-value evening windows | TOU-DR2 is not the same export-credit play; batteries and evening dispatch matter more. |
Under legacy NEM, exports before true-up are credited at retail/import rates according to the otherwise applicable rate schedule.
That makes the TOU period attached to exported solar important. Avoiding a super off-peak export bucket can be valuable.
The Solar Billing Plan uses export values based on grid avoided cost, usually lower than retail, with some high-value evening periods.
Batteries often matter more here because stored solar can reduce evening imports or target higher-value export windows.
TOU-DR2 may lose to a three-period plan if you have a large flexible load that can reliably charge overnight or during super off-peak.
This is why EV owners should compare actual charging hours, not just solar export credits.
- You are on NEM 1.0 or NEM 2.0, not the Solar Billing Plan.
- Your Green Button data shows a lot of exports or low net usage from about 10am to 2pm.
- You are not relying on super off-peak imports for EV charging, battery charging, or other large loads.
- You can keep 4pm to 9pm imports low, especially in summer.
- You compare the whole bill, including Base Services Charge and non-bypassable charges, not just energy periods.
The useful comparison is not just TOU-DR1 vs TOU-DR2 on published rates. It is what happens when your own imports and exports are mapped to those periods.