If your electric bill lately has made you do a double take, you’re not alone. Across California, homeowners are opening their statements in disbelief. Bills that were $150 a few years ago are now $300 or more, and experts predict they’re still heading higher.
The truth is, California’s energy costs are in the middle of a perfect storm. Utilities are raising rates to cover wildfire prevention, grid upgrades, and renewable energy investments. Meanwhile, new billing structures and time-of-use pricing are making every kilowatt-hour feel painfully expensive.
The bad news: it’s going to get worse before it gets better.
The good news: there are real ways to take control and protect yourself from the next rate hike.
Let’s break down why your bills are brutal, what’s coming next, and how you can fight back.
California’s Electricity Crisis: Why Rates Keep Going Up
California has some of the highest electricity prices in the country, and they’re rising faster than ever. The three biggest utilities, PG&E, SCE, and SDG&E, have all announced new rate increases for 2025 and 2026.
Here’s what’s driving the surge:
- Wildfire recovery and prevention costs. Utilities are spending billions to bury power lines, replace transformers, and reduce fire risks.
- Aging infrastructure. Much of California’s grid is decades old, requiring massive modernization.
- Climate goals and renewable integration. The shift to clean energy is critical but expensive in the short term.
- Administrative and transmission fees. These are quietly added onto every bill, often making up 30 to 40 percent of the total.
According to data from the California Public Utilities Commission (CPUC), residential rates have nearly doubled since 2013, and are projected to climb another 25 to 30 percent by 2026.
| Utility | 2023 Average Rate | 2025 Average Rate | 2026 Projected | Change (2023–2026) |
|---|---|---|---|---|
| PG&E | $0.31/kWh | $0.39/kWh | $0.44/kWh | +42% |
| SCE | $0.29/kWh | $0.37/kWh | $0.41/kWh | +41% |
| SDG&E | $0.34/kWh | $0.47/kWh | $0.50/kWh | +47% |
So when your bill feels higher each month, it’s not in your head. You’re paying some of the steepest rates in the country, and they’re still climbing.
You’re Not Using More, It Just Costs More
Many Californians are using the same amount of electricity they always have, but their bills have skyrocketed anyway. Here’s why.
Time-of-Use Pricing
Under California’s Time-of-Use (TOU) programs, the cost of electricity depends on when you use it. The most expensive power is between 4 p.m. and 9 p.m., when families are home cooking, charging devices, and running the AC.
During these hours, rates can jump to over 45 cents per kilowatt-hour, nearly triple what you’d pay off-peak.
Tiered Usage Penalties
Utilities charge more once you pass your “baseline” energy allowance. Once you cross that line, every additional kilowatt-hour is billed at a higher tier rate.
Delivery and Transmission Fees
Only part of your bill is actual electricity. The rest is delivery, maintenance, and infrastructure charges that increase every year, regardless of how much you use.
Wildfire and Climate Surcharges
Wildfire mitigation programs and climate initiatives have added permanent fees to nearly every California utility bill.
Fixed Monthly Fees
In 2026, utilities will begin adding income-based fixed charges, costing most households between $30 and $70 per month just for being connected to the grid.
So even if your usage stays flat, your total cost will still rise.
The Outlook: More Pain Ahead
According to CPUC projections and utility filings, California residential electricity rates will rise another 15 to 25 percent by the end of 2026.
That means the average household could see monthly bills increase by $40 to $80 within the next year or two, even without using more energy.
Utilities argue that these hikes are necessary for safety and grid reliability. But for homeowners, the result is the same: bills that feel brutal, unpredictable, and impossible to control.
And since California’s population is electrifying everything from vehicles to home heating, demand will keep growing, and so will costs.
What You Can Do Right Now to Lower the Damage
You can’t control the rate hikes, but you can control how much grid electricity you use and when you use it.
Short-Term Steps to Save
- Shift your habits. Run the dishwasher and laundry before 4 p.m. or after 9 p.m.
- Upgrade insulation and windows. Prevent cool or hot air from leaking.
- Use smart thermostats. They adjust temperature automatically based on TOU pricing.
- Unplug devices. Phantom energy from plugged-in electronics can add up to 10% of your usage.
These quick wins can trim a few dollars, but they won’t protect you from future rate hikes. To truly take control, you need to reduce your dependence on the grid itself.
The Real Solution: Take Control with Solar
Solar is more than just a clean-energy upgrade. It’s a financial shield against California’s rising electricity costs. When you generate your own energy, you lock in predictable savings that no utility can touch.
Why Solar Still Makes Sense Under NEM 3.0
Yes, export rates for solar energy dropped under California’s new Net Energy Metering (NEM 3.0) rules. But with the right setup, solar still delivers excellent returns, especially when combined with battery storage.
- Use your solar power directly during the day.
- Store extra energy in a battery for use during expensive evening hours.
- Avoid buying power from the grid when rates spike.
This approach can reduce your electric bill by 60 to 80 percent, and in many cases, bring it down to under $50 per month.
You can explore how fast your solar system would pay for itself using our detailed Solar ROI Calculator, which estimates savings and payback time based on your bill, system size, and region.
Real Example: A Homeowner Beats the Hikes
Take a Los Angeles homeowner who was paying around $320 per month in electricity. After installing a 6.5 kW solar system with battery storage, their monthly bill dropped to about $45.
They’re saving over $2,800 per year, every year, no matter how much PG&E or SCE rates increase.
Their payback period is just under 7 years, and after that, they’re generating free energy for the rest of the system’s 25-year lifespan.
How to Find Out If Solar Will Actually Save You
The best way to know your potential savings is to run the numbers. NRG Clean Power offers tools that make this easy.
You can get an Instant Quote and see what your system could cost after tax credits and rebates.
Or read our guide on solar panel cost per square foot to understand how installation pricing scales for different home sizes.
With the 30% Federal Clean Energy Tax Credit, many California homeowners are seeing complete systems paid off in less than 8 years.
FAQs
Are California electric bills going up again in 2026?
Yes. Utilities have already proposed new rate increases through 2026 to fund grid maintenance and wildfire safety.
Does solar still make sense under NEM 3.0?
Absolutely. Self-consumption and battery storage make solar even more valuable now than before.
Can I finance solar instead of paying upfront?
Yes. Most NRG Clean Power customers choose zero-down financing and pay less monthly than their old utility bill.
Will solar work during power outages?
Yes, if you pair it with a battery system such as a Tesla Powerwall or Enphase IQ Battery.
Final Thoughts: Protect Yourself Before the Next Rate Hike
California’s electricity costs aren’t just high; they’re unpredictable and rising fast. You can make small changes, but the only real protection is independence.
When you install solar, you’re locking in your own rate for decades. Every kilowatt-hour you produce is one less you have to buy from a utility whose prices keep climbing.
Your next bill doesn’t have to be brutal. Visit NRG Clean Power to explore your options and start your solar savings journey today.