SDG&E Peak Hours: 4-9 PM Costs $0.70/kWh. A Battery Cuts It (Without Losing NEM 2).

If you opened your last SDG&E bill and felt your stomach drop, this is not your imagination.

SDG&E peak hours run 4 p.m. to 9 p.m. every day, and that five-hour window is now the most expensive stretch of your day. The standard advice (run laundry at midnight, schedule the dishwasher) is not what is going to fix it.

I am Ian Crilly, residential manager and co-owner at RCH Renewables. We are a C-10 licensed solar and battery contractor (#1108682) in North County San Diego, and the question every homeowner I sit down with at our consults across Carlsbad, Encinitas, Oceanside, and Fallbrook raises within the first ninety seconds is the same: adding a battery does not change your NEM 2 status. If you are already grandfathered, you stay grandfathered. The CPUC wrote the rules to specifically encourage this.

Here is the actual math for North County San Diego homes in 2026, the rules around it, and what it costs.

SDG&E Peak Hours: What You Actually Pay From 4-9 PM

SDG&E's on-peak hours are 4 p.m. to 9 p.m., every single day of the year. Weekdays. Weekends. Holidays. That window is when grid demand stacks up across all of Southern California, and your rate per kilowatt-hour during those five hours is roughly twice what it costs at 2 a.m.

Here is what you are actually paying on Schedule TOU-DR1, the standard residential plan, effective January 1, 2026¹:

Plus a Base Services Charge of $0.79343 per day, roughly $24 per month fixed before any electricity use.

A few things to notice. Summer on-peak is $0.69654 per kWh. That is high. The same kilowatt-hour run at midnight costs $0.38814 in summer or $0.44933 in winter. That is a $0.31 difference per kWh in summer, every kWh, all five hours, every day, for five months.

If your AC is running through dinner and your dishwasher kicks on at 7 p.m., that is what you are paying for it.

Effective May 1, 2026, SDG&E expanded super off-peak to weekdays from 10 a.m. to 2 p.m. year-round, on top of the existing midnight to 6 a.m. window². That helps if you can shift loads into those windows. For most households, the 4 to 9 p.m. peak is still where the bill lands.

What you can shift, and what you can't

If you have already Googled this, you have probably seen the standard utility-blog tip: shift your laundry, dishwasher, and AC out of the 4 to 9 p.m. window. Run the dishwasher at 11 p.m. Pre-cool the house at 2 p.m.

Some of that helps. Most of it does not move the needle the way you want it to.

Laundry can wait until 10 p.m. Dishwashers run at midnight. EV charging is the easiest one. Schedule it in your car's app and forget about it.

But the loads that actually drive your peak-hour bill are the ones you cannot politely ask to leave the house:

• AC running through a 95° August evening because your house has been holding heat from the afternoon
• Dinner cooking at 6 p.m. because that is when dinner is
• Lights, TV, kids' devices, fans, refrigerator cycling, the baseline of an occupied home from 5 to 9 p.m.

In a typical North County summer evening, the shiftable load is maybe 30 to 40 percent of your peak-window usage. The rest is fixed. You can run laundry at midnight and still get a $400 bill if your AC is fighting through dinner.

That is why the “shift your laundry” advice feels insufficient. It is.

The fix: a battery that covers your peak window

A properly sized home battery does what schedule-shifting cannot. Instead of moving your loads, it moves your power source. Your solar produces during the day. The battery stores it. When 4 p.m. hits and rates jump, your home runs on stored solar instead of grid energy. The AC does not notice. The cook does not change anything. The bill just stops.

The math, using SDG&E's published 2026 rates:

If your home shifts 10 kWh of load out of the 4 to 9 p.m. peak window each day (lights, modest AC, basic cooking), you are saving about $92 a month, or $1,124 a year on summer peak alone.

A home that is running AC hard through dinner, charging an EV in the evening, and stacking 15 to 20 kWh into the peak window? You are looking at $138 to $185 a month in savings during summer. That is $1,650 to $2,200 a year on the AC season alone, before counting winter savings or any solar export value.

A Tesla Powerwall 3 holds 13.5 kWh per unit. For most homes, one unit covers the full 4 to 9 p.m. window. Larger homes with whole-home AC or EV charging in the evening may want two units for full coverage and longer backup runtime during outages.

“Won't I lose my NEM 2 if I add a battery?”

This is the question. Every consult. Every time.

The short answer is no. The long answer is the CPUC wrote the rules specifically to encourage NEM 2 customers to add batteries.

If you went solar before April 14, 2023 and got Permission to Operate before April 15, 2026, you are locked into NEM 2 for 20 years from your interconnection date³. NEM 2 credits your exported solar at near-retail rates, around $0.30 per kWh depending on the time of day. NEM 3 (the new Net Billing Tariff) credits exports at roughly $0.05 to $0.08 per kWh. That is a 75 percent reduction in what the grid pays you for every kilowatt-hour you send back.

That delta is real money. It is also why “do I lose NEM 2 if I add a battery?” is the most common question I hear at consults. So let me quote the actual rule.

“Existing NEM 1.0 and NEM 2.0 customers are permitted to add battery storage without triggering a tariff change.”

CPUC Decision D.22-12-056, the ruling that created NEM 3

Tesla's own support documentation says it directly:

“For existing NEM 1.0 and NEM 2.0 customers, adding battery storage does not affect your existing status.”

Tesla Energy Support documentation

The technical reason: when you add only a battery, the CPUC treats it as a system enhancement, not a new installation. Your interconnection agreement stays the same. Your NEM 2 rate stays the same. The battery charges from your existing solar, time-shifts that energy, and dispatches it back to the home (and optionally to the grid) through your existing interconnection.

There is no cap on battery size. You can add one Powerwall, two, three, or four. The CPUC does not put a ceiling on storage capacity for grandfathered customers. Only solar panel additions are capped.

The one caveat

If you also want to add new solar panels (not just a battery), the addition is limited to 10 percent of your original system capacity, or 1 kW, whichever is greater. Battery alone is fully safe. Significant new panels are not. If your system is undersized and you want both more solar and a battery, talk to us first. There are configurations (like non-export setups) that handle this within the rules, but the path is specific to your system.

The plain version we use with customers

We configure the battery so your existing solar continues operating exactly as it did. Your NEM 2 rate stays the same. Tesla Powerwall 3 and Enphase IQ batteries support the non-export setting natively if it is needed.

What about rebates and tax credits in 2026?

A few things you might have heard about that are not real anymore for residential solar plus battery:

• The federal residential solar tax credit (30 percent) expired December 31, 2025. We do not include it in current quotes.
• SGIP's general availability is over. The ratepayer-funded budgets that most homeowners used closed to new applicants December 30, 2025. We do not quote SGIP.

What is still real value, even if nobody is calling it an “incentive”:

We do not sell on rebates that do not exist. The math works on the actual rate spread or it does not. If it does, we will show you. If it does not, we will tell you.

What a Tesla Powerwall 3 costs in 2026

Tesla Powerwall 3 installed prices, as of today:

The rapid-shutdown add-on applies to standalone battery installs (a battery added to your existing solar) when your existing solar setup needs rapid-shutdown coordination. For new solar plus Powerwall bundles, rapid-shutdown is part of the solar install and there is no separate line item.

We give you an exact number after a free site assessment. No “starting at” pricing, no surprise fees.

For full Powerwall 3 specs, runtime during outages, warranty details, and how it integrates with existing solar: Tesla Powerwall installation in San Diego →

When to act

A few things we are watching:

The right time to add a battery is “before the next summer bill.”