SCE Time-of-Use Rates and Solar California 2026: TOU-D-PRIME Explained

When Southern California Edison moved all residential customers to time-of-use rates, it quietly changed the entire financial equation for solar in the Inland Empire. Your solar panels produce most of their power between 10am and 2pm. SCE charges its highest rates from 4pm to 9pm. That four-hour gap is the central problem every solar customer in Temecula, Murrieta, and Menifee needs to understand before installing a system.

Under the old tiered rate structure, solar was simple: produce more than you use over the month and your bill goes to zero. Under TOU-D-PRIME and the other current SCE rate plans, it is more nuanced. You can produce enough solar energy to theoretically cover 100 percent of your annual usage and still owe SCE money because the hours you produce and the hours you consume do not match up.

This guide explains every SCE TOU plan relevant to solar customers, shows you the math on battery arbitrage and self-consumption, covers how NEM 3.0 export credits interact with peak versus off-peak windows, and tells you exactly what questions to ask before choosing a TOU plan or adding battery storage.

What TOU Rates Are and Why SCE Switched Everyone to Them

Time-of-use rates charge different prices per kilowatt-hour depending on when you consume electricity. The principle is simple: electricity is more expensive to produce and deliver when everyone wants it at the same time. SCE and the California Public Utilities Commission designed TOU rates to send a price signal to customers: shift your consumption to off-peak hours and pay less; consume during peak demand and pay the grid's real cost.

The CPUC began requiring California utilities to transition residential customers to TOU rates as part of the state's broader grid modernization effort. The theory is that widespread TOU adoption reduces strain on the grid during peak demand periods, which in California typically run from late afternoon through early evening as people return home, use air conditioning, cook dinner, and charge devices. This peak demand period aligns precisely with when solar production is declining and grid stress is highest.

For solar customers, TOU rates represent both a challenge and an opportunity. The challenge: your solar panels are most productive during SCE's cheapest hours. The opportunity: a battery system that charges on your cheap solar power during off-peak hours and discharges during the expensive peak can generate real bill savings that solar alone cannot. The CPUC understood this dynamic and designed NEM 3.0 specifically to push solar customers toward battery adoption by making export credits during off-peak hours nearly worthless.

SCE's Current TOU Plans: TOU-D-PRIME, TOU-D-4-9PM, TOU-D-5-8PM

SCE offers several residential TOU plans. Three are most relevant to solar customers: TOU-D-PRIME, TOU-D-4-9PM, and TOU-D-5-8PM. Each has different peak windows, different rate structures, and different implications for how you should size your battery and configure your system.

How TOU Rates Interact With Solar: Peak Export Credit vs Peak Import Cost

The financial interaction between TOU rates and solar creates a situation that surprises many new solar customers. Your solar panels are producing maximum power during SCE's cheapest hours, and your household draws the most grid power during SCE's most expensive hours. Under NEM 2.0, this mismatch did not matter much because export credits were close to retail rates regardless of time of day. Under NEM 3.0, the mismatch is the central financial problem.

Here is the concrete math. A 10kW system in Temecula on a clear summer day might produce 50 kilowatt-hours total. Thirty kilowatt-hours of that production occurs between 9am and 3pm when rates are $0.26 per kilowatt-hour. If you are away from home during those hours and your AC is off, most of that production gets exported to the grid. Under NEM 3.0, SCE credits you roughly $0.04 per kilowatt-hour for that export, netting you $1.20 for 30 kilowatt-hours.

Then from 4pm to 9pm you return home. The AC kicks on, you cook dinner, launder clothes, and charge devices. You draw 15 kilowatt-hours from the grid at $0.51 per kilowatt-hour, costing $7.65. Your solar system exported power worth $1.20 and you imported power costing $7.65. The same energy volume in two directions creates a $6.45 net cost for the day.

A battery eliminates this scenario. The same 30 kilowatt-hours of midday production charges the battery instead of exporting to the grid. The battery then discharges during the 4pm to 9pm peak, eliminating the $7.65 import cost entirely. The difference in daily outcome is $6.45 per day during summer months, which adds up to over $1,000 annually in Temecula's 200-plus-day sunny season.

NEM 3.0 Avoided Cost Rate vs Retail Import Rate: Why the Gap Changes Everything

The CPUC's NEM 3.0 decision replaced retail-rate export credits with "avoided cost" credits based on the ACC Plus methodology. The avoided cost represents what SCE would have paid for that power from its cheapest available generating source, which during daytime solar production hours is often cheap wind or utility-scale solar that SCE already owns or contracts.

During the hours when your rooftop solar peaks, from roughly 9am to 2pm, SCE's grid is also flush with utility-scale solar production. The avoided cost is low because SCE has plenty of cheap generation available. The ACC export credit during those hours runs as low as $0.02 to $0.05 per kilowatt-hour. In contrast, the retail rate you pay to import electricity during the same hours on TOU-D-PRIME runs $0.26 per kilowatt-hour.

During the 4pm to 9pm peak window, the avoided cost is higher because the grid is stressed and SCE needs expensive peaker plants to meet demand. The ACC export credit can reach $0.15 to $0.25 per kilowatt-hour during peak hours in summer. This is still far below the retail import rate of $0.51 per kilowatt-hour, but it is a meaningfully better credit than the daytime export rate.

Every kilowatt-hour your solar system produces and you consume directly in your home saves you the full import rate. Every kilowatt-hour you export earns you the much lower avoided cost credit. Under NEM 3.0, self-consumption is worth 5 to 15 times more than export at any hour of the day. This is not a rounding error; it is a structural design feature of the rate. Size your system for your actual consumption, not for maximum export volume.

Optimal Battery Charging Strategy Under TOU-D-PRIME

A battery paired with solar under TOU-D-PRIME should be programmed to follow a specific daily cycle that maximizes the arbitrage between off-peak and peak rates. Most modern home batteries, including the Tesla Powerwall 3, Enphase IQ Battery, and Franklin WH Home Battery, support programmable TOU modes that automate this cycle.

This cycle maximizes the daily arbitrage value by ensuring every kilowatt-hour you store came from either free solar or cheap off-peak grid power, and every kilowatt-hour you discharge displaces expensive peak-rate grid power. Over a full year in Temecula, this cycle typically captures $800 to $1,400 in peak avoidance savings per battery, depending on household consumption and battery size.

Why West-Facing Panels Are Worth Considering Under TOU Peak Windows

Conventional solar installation advice has always favored south-facing panels for maximum total annual production. That advice made sense under flat-rate or tiered billing where every kilowatt-hour was worth the same regardless of when it was produced. Under TOU-D-PRIME, the math changes.

A south-facing 10kW system in Temecula produces roughly 17,000 kWh per year. A west-facing system of the same size produces approximately 14,000 to 15,000 kWh per year, about 12 to 15 percent less in total volume. But the west-facing system produces 30 to 40 percent more during the 4pm to 7pm window than the south-facing system, because the sun angle favors a west-facing plane during afternoon hours.

In Temecula during June, a west-facing 10kW system might produce 5 to 7 kWh between 4pm and 7pm on a clear day, compared to 1 to 2 kWh from a south-facing system in the same window as the sun moves west. Under TOU-D-PRIME, those extra 4 to 5 kWh during peak hours are worth $0.51 each, or roughly $2.04 to $2.55 more than the south-facing alternative in the same window. Across 200 sunny peak-production days per year, that is an additional $408 to $510 in annual savings from peak-hour production alone.

The optimal configuration for many Temecula homes with adequate roof space on both orientations is a split array: south-facing panels for volume and battery charging during peak solar hours, west-facing panels for late-afternoon peak-hour production. Your installer should model both configurations with your actual roof geometry and TOU rate before recommending a layout.

How to Read Your SCE TOU Bill to Spot Peak Charge Spikes

Most SCE customers look at their bill total and miss the breakdown that matters. Under TOU billing, the line items you need to review are the peak and off-peak consumption charges separately, not the total. SCE's bill format separates these, but they are buried in the rate detail section that most customers skip.

Self-Consumption vs Export: Which Is More Valuable Under Current TOU Rules

Under NEM 3.0 combined with TOU pricing, self-consumption of every kilowatt-hour your solar system produces is significantly more valuable than exporting it to the grid. This was not true under NEM 2.0, where export credits were close to retail rates and the distinction mattered less.

The self-consumption value is the retail rate you avoid paying SCE for that kilowatt-hour. During off-peak hours that is $0.26 per kilowatt-hour. During peak hours it is $0.51 per kilowatt-hour. The export value under NEM 3.0 ranges from $0.02 to $0.25 per kilowatt-hour depending on the time of day. At every hour of the day, self-consumption is worth more than export.

The implication for system sizing is significant. Under NEM 3.0 with TOU rates, a system that produces exactly what you consume has a far better return per kilowatt of capacity than a system that produces 150 percent of what you consume and exports the excess. Do not oversize your system for export volume. Size it for maximum on-site consumption, then add battery storage to capture what you would otherwise export at low credit rates.

SCE's EV Rates (TOU-EV-1, TOU-EV-2): Interaction With Solar for EV Owners

SCE offers two rate plans specifically designed for electric vehicle owners: TOU-EV-1 and TOU-EV-2. Both plans feature a super-off-peak period late at night that allows EV charging at significantly reduced rates. For Temecula homeowners with both solar panels and an electric vehicle, choosing the right rate plan requires modeling three variables: solar production, battery storage, and EV charging patterns.

TOU-EV-1 creates a three-tier rate structure with peak from 4pm to 9pm, off-peak from 9am to 4pm and 9pm to midnight, and a super-off-peak window from midnight to 9am. The super-off-peak rate for EV charging runs approximately $0.13 to $0.16 per kilowatt-hour, which is roughly half the standard off-peak rate. Charging a 75 kWh EV battery from empty at the super-off-peak rate costs approximately $9.75 to $12.00. The same charge at the peak rate would cost $38.25.

For solar-plus-EV homeowners, the optimal strategy is: charge the EV overnight on the super-off-peak grid rate (midnight to 6am), use solar to power the home during the day and charge the battery, and discharge the battery during the 4pm to 9pm peak. Some EV owners with a larger battery (Powerwall 3 at 13.5 kWh, or two batteries at 27 kWh) can use the home battery to cover peak-hour loads entirely and still have the EV charge from cheap overnight grid power.

For a household driving 15,000 miles per year in an EV averaging 3.5 miles per kilowatt-hour, annual charging needs approximately 4,286 kWh. Charging all of that at the TOU-EV-1 super-off-peak rate versus the standard TOU-D-PRIME off-peak rate saves approximately $514 per year. Run the SCE rate comparison tool with your actual EV mileage before switching plans.

Time-of-Use Arbitrage: Charging at Off-Peak and Discharging at Peak

Battery arbitrage under TOU rates is one of the cleaner financial calculations in the solar-plus-storage world because it does not depend on solar production estimates, weather, or NEM export rates. It depends on two numbers: the rate you pay to charge and the rate you save by discharging. Both numbers are in your SCE rate schedule.

Under TOU-D-PRIME in summer, off-peak is approximately $0.26 per kilowatt-hour and peak is approximately $0.51 per kilowatt-hour. The gross arbitrage spread is $0.25 per kilowatt-hour. A 13.5 kilowatt-hour battery at 90 percent round-trip efficiency can deliver 12.15 kilowatt-hours of usable energy per cycle. At a $0.25 spread, each full cycle is worth $3.04 in gross savings.

This arbitrage value is additive to the solar self-consumption savings. A solar-plus-battery system captures both: the solar system eliminates off-peak consumption charges during the day, and the battery eliminates peak consumption charges in the evening. At a net battery cost of $10,000 to $12,000 after the 30 percent ITC, the arbitrage savings alone represent a 8 to 12 year payback for the battery component, before counting backup power value during PSPS events.

How TOU Plan Selection Affects Solar Payback Period Calculation

The TOU plan you are on when you install solar directly affects your payback period calculation because it determines both the value of energy your solar system saves you and the baseline bill your solar system is reducing. Two homeowners with identical systems, identical production, and identical total annual usage can have meaningfully different payback periods depending on their TOU plan and consumption timing.

A household that runs major loads, including dishwasher, laundry, and EV charging, during off-peak hours has a lower effective blended rate than a household with the same total usage concentrated in peak hours. The solar system provides the same production for both households, but the value of that production is higher for the household with peak-hour loads because solar and battery together are displacing more expensive electricity.

For your payback period calculation, the correct annual savings figure is not simply "annual SCE bill before solar minus residual SCE bill after solar." It must account for the specific hours your solar production replaces consumption and the specific hours your battery discharges. A payback calculation that uses a blended average rate without modeling the time-of-use split will be inaccurate, often by 20 to 30 percent.

Installers who cannot answer these questions with specifics are using a generic payback model that may not reflect your actual TOU situation. Request the detailed hourly production and savings breakdown, not just the summary payback number, before signing any contract.

Switching TOU Plans After Solar Install: What SCE Allows

SCE allows residential solar customers to switch between eligible TOU rate plans after their system is installed and interconnected. You are not locked into the plan you were on at the time of installation. This is important because your consumption pattern may change after going solar, and the optimal plan before solar is not necessarily the optimal plan after solar.

The switch process is straightforward. Log into your SCE account at sce.com, navigate to "My Account" and then "Rate Plan," and select the rate comparison tool. SCE's tool will estimate your annual bill under each eligible plan based on your last 12 months of actual usage data. Select the plan you want and the switch takes effect on your next billing cycle. There is no fee to switch.

The plans available to NEM 3.0 solar customers include TOU-D-PRIME, TOU-D-4-9PM, and TOU-D-5-8PM. If you add an EV after your solar installation, you become eligible for TOU-EV-1 or TOU-EV-2 as well. When adding a battery to an existing solar system, revisit your TOU plan selection because the battery changes your net consumption profile during peak hours, which can make TOU-D-PRIME more or less advantageous depending on your specifics.

One constraint to be aware of: if you are a NEM 2.0 grandfathered customer, your NEM status is tied to your interconnection agreement, not your rate plan. You can switch TOU plans without losing your NEM 2.0 grandfathering. However, adding significant new load capacity or substantially modifying your solar system may trigger a review of your interconnection agreement that could affect your NEM status. Confirm with SCE before making any system changes beyond routine maintenance.

CARE and FERA Rate Programs: How They Change the TOU Solar Calculation

The CARE program provides a 30 to 35 percent discount on electricity charges for income-qualifying households. FERA provides a 12 percent discount for households that do not qualify for CARE but meet slightly higher income thresholds. Both programs apply on top of your TOU rate plan, reducing both peak and off-peak rates proportionally.

For solar customers on CARE, the absolute dollar value of peak avoidance is lower than for non-CARE customers. A non-CARE customer on TOU-D-PRIME saves $0.51 per kilowatt-hour by avoiding peak consumption. A CARE customer on TOU-D-PRIME saves roughly $0.34 to $0.38 per kilowatt-hour after the CARE discount is applied. The arbitrage spread between off-peak and peak is proportionally similar, but the absolute values are lower.

The NEM 3.0 export credit is not affected by CARE status. The avoided cost credit is the same regardless of your rate category. This means the gap between the export credit and the import rate you avoid is smaller for CARE customers than for non-CARE customers. However, self-consumption still generates significantly more value than export for CARE customers, just at a lower absolute dollar amount per kilowatt-hour.

CARE and FERA status does not disqualify a household from solar installation or from NEM 3.0 interconnection. If you qualify for CARE, apply before evaluating solar economics, because the baseline rates in your payback calculation will be different than the standard TOU rates published by SCE. An installer who quotes you using standard SCE rates when you are on CARE will overstate your solar savings.

Future TOU Changes: CPUC Proceedings and What Is Coming for SCE Residential Rates

The CPUC has multiple active proceedings that will affect SCE residential rate structures over the next several years. The most significant is the Income Graduated Fixed Charge (IGFC) proceeding, which California's AB 205 (2022) required the CPUC to implement. The IGFC will add a fixed monthly charge to all SCE residential bills based on household income, ranging from approximately $6 per month for low-income households to $73 or more per month for higher-income households.

The tradeoff for the fixed charge is a reduction in per-kilowatt-hour volumetric rates. The CPUC's theory is that lower per-kilowatt-hour rates benefit all users, including solar customers who currently receive NEM credits based on those volumetric rates. For solar customers, lower volumetric rates reduce the value of self-consumption, while the fixed charge adds a baseline monthly cost that solar cannot offset.

Separate from the IGFC proceeding, SCE has ongoing General Rate Cases before the CPUC that will continue to drive up baseline residential rates. The CPUC has approved SCE rate increases in every recent General Rate Case filing. SCE's own long-range financial planning assumes continued capital investment in wildfire mitigation, grid hardening, and the buildout of infrastructure to support California's 2035 zero-emission vehicle mandate.

For existing and prospective solar customers, the IGFC adds a new variable to the payback calculation. If you are modeling a solar installation today, the income-based fixed charge that takes effect in the next year or two will increase your residual SCE bill regardless of solar production. Budget for approximately $20 to $40 per month in fixed charges that solar cannot eliminate. This is a reason to install sooner rather than later, since the economics of solar remain positive but the baseline monthly cost floor is rising.

Calculating Your Optimal TOU Plan With Solar and Battery in Temecula

The correct way to select a TOU plan for a solar-plus-battery household in Temecula is a three-step process: gather your actual hourly usage data, model each eligible plan against that data including the impact of solar production and battery dispatch, and compare net annual cost under each plan.

SCE's online rate comparison tool does a simplified version of this analysis automatically using your actual usage data, but it may not account for the battery dispatch optimization or the solar production shift from different panel orientations. For a full analysis, ask your installer to run the hourly simulation in their design software, which tools like Aurora Solar and Helioscope support.

Getting a TOU-Optimized Solar Quote for Your Temecula Home

A standard solar quote that does not account for your specific TOU rate situation is incomplete. The difference between a TOU-optimized system design and a generic square-footage-based design can amount to $500 to $1,200 in annual savings difference, which compounds significantly over the 25-year system lifetime.

When requesting a quote, ask any Temecula-area installer to provide the following: your proposed system's modeled self-consumption rate under NEM 3.0, a production estimate that distinguishes between peak-hour and off-peak-hour output by orientation, the recommended TOU plan for your system and usage profile, and the annual battery arbitrage savings modeled separately from the solar self-consumption savings.

Installers who cannot provide this level of detail are likely using a generic payback model that assumes you will always self-consume 80 percent of production and export 20 percent at a rate that may not reflect NEM 3.0 reality. The installers who can show you the TOU hour-by-hour analysis are the ones who have modeled enough Temecula systems to understand the specific dynamics of SCE rates in the Inland Empire climate.

At Temecula Solar Savings, every quote we provide includes a full TOU analysis based on your actual SCE bill data, a battery sizing recommendation optimized for your peak-hour consumption pattern, and a payback period that models solar self-consumption and battery arbitrage separately so you can see where each component of your savings comes from. Call us at (951) 347-1713 or use our calculator to get started.

Frequently Asked Questions: SCE TOU Rates and Solar California