Can You Run the AC All Day Once You Have Solar?

Why your AC and your electric rate peak at the same time

This isn't three utilities independently deciding to punish air conditioning. It's the shape of the California grid. Statewide solar output crashes every afternoon as the sun drops, right as home and building cooling loads are still near their daily high and everyone gets home from work and turns on more of everything. Grid operators and utilities call the resulting shape the "duck curve," and it's the reason PG&E, SCE, and SDG&E all built their standard residential time-of-use rate plans around a 4 p.m.–9 p.m. peak window — the hours when the grid needs the most expensive power plants running to cover demand solar can no longer meet.

PG&E's Schedule E-TOU-C, the tariff most residential customers default to, sets on-peak hours at 4-9pm every single day of the year — PG&E doesn't even shrink the window in winter; the filed tariff sheet defines both summer and winter peak identically as "4:00 p.m. to 9:00 p.m., All days." SDG&E's Schedule TOU-DR1 does the same: on-peak is 4-9pm every day, weekdays and weekends alike, no exceptions. SCE's Solar Billing Plan customers are steered onto Schedule TOU-D-PRIME, which SCE's own site describes as required for anyone on Net Billing, with a summer on-peak window in the same late-afternoon-to-evening band.

The result for a solar owner: the hour your AC compressor is working hardest against the day's peak heat is also the hour your panels have the least (or nothing) to give, and the hour your utility charges you the most to make up the difference from the grid.

What NEM 3.0 actually pays you — and why it doesn't rescue evening AC use

The Net Billing Tariff, adopted by the California Public Utilities Commission in Decision D.22-12-056 (December 15, 2022), applies to anyone at PG&E, SCE, or SDG&E who submitted their interconnection application on or after April 15, 2023. It replaced the old one-for-one net metering credit with export compensation based on the CPUC's Avoided Cost Calculator — a rate that varies by hour, day type, and month, and which the CPUC's own consumer materials describe as "usually lower than the retail rate."

That's the mechanism people miss. Under net metering, exporting a kWh at noon and importing one at 7pm was a wash. Under Net Billing, the noon export is often credited at a few cents, while the 7pm import costs you the full peak retail rate — 40 to 70 cents depending on utility. So even a fully paid-off, oversized solar system doesn't erase the cost of running AC hard into the evening: it just means you're spending your own midday export credits, worth a fraction of what you're paying to import the power back that night.

One thing that hasn't changed: the CPUC guarantees the original solar owner access to the Solar Billing Plan for at least 9 years from the date the system starts operating, per the Commission's Solar Consumer Protection Guide Addendum (published September 2, 2025). If you bought the system, that clock is running from your interconnection date, not from today.

What an extra hour of AC actually costs, by utility

Assume a typical mid-size central AC system drawing roughly 3.5 kW while running — a standard HVAC rule of thumb (roughly 1–1.5 kW per ton of cooling capacity), not a figure we independently verified against a DOE or Energy Star source this pass, so treat it as illustrative rather than exact for your specific system.

On PG&E's E-TOU-C, one extra hour of AC during the 4-9pm summer peak costs about $1.83 (at $0.52240/kWh, verified against the filed tariff sheet). Run that same hour during off-peak instead and it costs about $1.40 (at $0.39940/kWh) — roughly 31% more just from timing, before you even account for the fact that at 7pm your panels are producing close to zero, so essentially all of that peak-hour draw is grid-imported at the top rate.

On SDG&E's TOU-DR1, the gap is worse: one peak hour costs about $2.44 (at $0.69654/kWh summer on-peak, verified against the SDG&E rate table) versus about $1.36 during super off-peak (at $0.38818/kWh) — roughly 80% more for the identical hour of cooling, just because of the clock. Note that SDG&E's genuine off-peak rate (as opposed to its cheaper super off-peak tier) is $0.47560/kWh — still a large gap from peak, just not as dramatic as the super off-peak comparison. SCE's published TOU-D-PRIME figures point the same direction (summer on-peak near $0.59/kWh versus off-peak near $0.26/kWh), though those numbers come from SCE's customer-facing rate page rather than the filed tariff sheet, so treat them as directionally right rather than penny-exact.

The pattern holds across all three utilities: the same AC use costs 30-80% more depending only on what time the thermostat calls for cooling.

Pre-cooling: the one habit that actually offsets the peak window

Pre-cooling means running the AC harder than you need to during the cheap, high-solar hours of the day so the house coasts through the expensive hours instead of fighting them. It's the same principle California's grid operator, utilities, and energy commission jointly recommend for Flex Alert conservation days: flexalert.org tells residents to pre-cool their home by lowering the AC ahead of the event window, then hold the thermostat at 78°F or higher (health permitting) once the expensive hours begin, and to avoid using major appliances "in the late afternoon when rates are higher."

That's emergency-day messaging, not a routine daily protocol with a published start time or target temperature — we didn't find an official source giving an exact "start cooling to X degrees at Y o'clock" recipe, so don't treat any specific number here as an official recommendation. But the underlying logic applies every day you're on a TOU rate, not just on Flex Alert days: your solar is at or near its production peak from roughly late morning through mid-afternoon, which is also when import rates are at their lowest point on every one of these tariffs. Cooling the house down further than normal in that window, so it drifts upward gradually rather than needing active cooling once the sun drops and rates jump, shifts kilowatt-hours out of the $0.52-$0.70/kWh window into the $0.26-$0.40/kWh window — free of charge if your panels are covering it, cheap if they're not.

Thermostat scheduling built around your actual TOU periods

The mistake most solar owners make is leaving the thermostat on a flat schedule that doesn't know their rate plan exists. A smart thermostat scheduled to your utility's actual TOU windows does three things a flat schedule can't: lower the setpoint during super off-peak and off-peak hours when both solar production and rates favor you, let the temperature drift up slightly right as peak begins (rather than fighting to hold a fixed number through the most expensive hours), and resume normal cooling the moment peak ends.

Because PG&E and SDG&E both run identical 4-9pm peak windows year-round, the same schedule works through summer and winter on those two utilities — you're not reprogramming seasonally. SCE customers on TOU-D-PRIME have a slightly different structure (weekend afternoons price as a lower "mid-peak" tier rather than full on-peak, for instance) so the schedule needs adjusting between weekdays and weekends there. Note also that SCE limits TOU-D-PRIME to customers who confirm ownership or lease of a qualifying clean-energy technology — an EV, a home battery, or an electric heat pump — so eligibility isn't automatic the way it is on PG&E's and SDG&E's plans.

The habit that costs people the most: coming home at 5 or 6pm to a warm house and cranking the AC down several degrees at once. That's precisely peak pricing, precisely the hours solar isn't helping, and precisely the largest, longest compressor run of the day. Pre-cooling before you leave for work, or scheduling the drop to happen an hour before you're expected home but during off-peak, avoids stacking your single biggest cooling demand directly on top of your single most expensive hour.

Battery pairing: what changes, and what doesn't

A home battery is the closest thing to an actual fix for the AC-versus-peak-rate problem, because it lets you store the cheap midday solar you'd otherwise export for a few cents and use it yourself during the 4-9pm window instead of buying grid power at the peak rate. The CPUC's own consumer guidance on the Solar Billing Plan points installers toward exactly this pattern: if you're installing a battery, ask your installer to set the system to store excess energy during off-peak hours and send energy back to the grid — or to the house — during peak hours, rather than exporting or importing at those hours' respective rates.

That changes the AC math directly. Instead of the 4-9pm compressor draw coming from the grid at $0.52-$0.70/kWh, it comes from stored solar you already generated for close to free. The tradeoff is upfront cost and battery capacity: a 10-13 kWh home battery, common for residential installs, isn't necessarily sized to cover several hours of heavy AC plus everything else running in the house during a hot evening, so it reduces peak-hour grid draw rather than eliminating it on the hottest days.

On incentives: California's Self-Generation Incentive Program (SGIP) still funds battery storage for income-qualified households through its Equity and Equity Resiliency tiers, with the CPUC having authorized $280 million for the residential Solar and Storage Equity budget — but SGIP budgets are administered on a rolling, sometimes-waitlisted basis, and we could not confirm the live 2026 status of any specific tier as of this research. Check current availability at selfgenca.com or with a Program Administrator directly before counting on it in a purchase decision.

The exception: publicly owned utilities don't play by these rules

Everything above describes PG&E, SCE, and SDG&E, because the CPUC's Net Billing Tariff and its Decision D.22-12-056 only reach those three investor-owned utilities. Publicly owned utilities — LADWP, SMUD, MID, Anaheim, Roseville, Lodi, Imperial Irrigation District, and Turlock Irrigation District among them — are not regulated by the CPUC and are not on NEM 3.0 at all. Each sets its own net metering and rate terms through its own governing board.

Those utilities also generally charge less to begin with: recent residential rates run roughly 26-28 cents/kWh at LADWP and, on SMUD's flat residential rate, roughly 14-22 cents/kWh depending on season — well under the 34-70 cent peak rates on the three IOUs. These are approximate, blended figures from each utility's own current rate materials, not a claim about any specific published TOU tariff line. If you're a customer of one of these publicly owned utilities, the specific peak-window, export-rate math in this piece doesn't apply to you — check your own utility's current net metering tariff and TOU schedule (if it has one) instead of assuming NEM 3.0 rules or IOU rates apply.