Nearly 40 million people call California home, and statewide energy use is projected to increase for the next two decades. While Californians may be most familiar with water conservation efforts and drought response programs, the state has also implemented several evolving strategies to help reduce electricity consumption and balance local energy supply and demand.
In this article, we outline how energy conservation efforts affect homeowners in California to showcase how solar energy systems can reduce your ongoing expenses and increase your power resilience with sustainable access to electricity at home.
The effects of rising energy demand in California
While statewide energy demand grows annually, increased consumption during peak usage hours causes electricity rates to rise each day, which can comprise sustainable access to power with high levels of stress on the local energy grid. Throughout the year, California’s energy demand is highest in the summer, with peak periods in the late afternoon and early evening.
In response to increased energy demand, both annually and throughout each day, Californians may be affected in the following three ways.
Increased energy prices
In 2006, the average price of home electricity in California was about 14.14 cents/kWh. In 2024, it is 34.26 cents/kWh, which is more than twice the national average rate and represents a 142.27% price increase over 18 years.
Time-of-use (TOU) rate plans
Today, most California electric utilities have adopted time-of-use rate plans, which assign the price of electricity based on local energy demand. With TOU plans, utility customers are encouraged to favor grid electricity consumption during “off-peak” hours when rates are lower to help balance local energy supplies.
Rotating power outages
As a last resort, several utilities in California have implemented rotating power outages to help prevent widespread blackouts when the energy grid is under extreme stress. Usually only lasting one or two hours, Californians can power through rotating outages with home battery storage or a backup generator.
Conserving energy, saving money during peak demand hours
With efficient appliances and smart usage habits, you can reduce your home’s electricity consumption, monthly expenses, and impact on local energy demand spikes in California. To maximize energy savings while using grid-supplied electricity, consider running high-consumption appliances, like air conditioners, laundry, and dishwashers, outside of peak demand hours.
To save money and conserve energy, you can also:
- Use a smart thermostat to set comfortable room temperatures before peak demand periods
- Explore alternative home cooling methods like fans, drapes, or window coverings
- Make building envelope improvements such as energy-efficient doors, windows, sealing, or insulation to better maintain interior temperatures
- Install home energy storage and sell electricity to the utility at high rates for exported power
Demand response programs for energy conservation
To encourage energy conservation, several utilities in California have implemented demand-response (DR) programs in which customers receive bill credits for intentionally lowering electricity consumption during peak demand hours. For example, those who enroll in PG&E’s Power Saver Rewards can earn bill credits by reducing electricity use between 4 p.m. to 9 p.m. on select days between May 1 and October 31.
While enrolled, DR participants receive notifications with the details of optional, forthcoming events. Bill credits are typically tallied at the end of each season, with compensation for all events in which property energy consumption successfully stays below a set parameter.
Maximizing energy conservation and savings with solar
Californians with solar energy and storage systems can maximize their electricity savings within demand response and time-of-use-billing programs, while also providing a sustainable source of power throughout local outages. With increased energy independence, savings, and resilience, a solar energy installation can help reduce your long-term spending on grid electricity with self-consumption of solar power and strategic grid exports within net metering or net billing tariff (NBT) agreements.
Active demand-response participation
Homeowners with solar and battery systems can reduce grid electricity consumption within demand-response programs by using solar power and stored energy during peak demand events. Paired with high-performance technology, the Enphase App makes it easy to see and control your property’s electricity production and consumption, including optional automation for optimal energy savings.
Virtual power plants and grid-sharing programs
Californians with solar and battery systems can also be compensated for exporting stored energy to the grid during peak-demand hours within virtual power plant (VPP) programs. By tapping into customer-owned resources, rather than building additional energy production facilities, experts believe accelerated VPP adoption could help save Californian ratepayers $550M annually by 2035.
Getting started with home solar in California
There are hundreds of certified installers in California available to help optimize your solar energy system. While talking to local professionals, it is important to evaluate which energy conservation efforts may impact your system’s value and performance. To design your solar energy system and see what programs or incentives are available in your area, Enphase is here to help.
FAQs
Solar panels alone will shut off during any grid outage—that includes wildfire-related PSPS outages—because grid-tied systems are required to disconnect for safety. An Enphase IQ Battery keeps your home running when the grid goes down, and the Storm Guard feature in the Enphase App automatically monitors National Weather Service alerts and charges your battery to 100% before a storm or outage hits—giving you backup power exactly when you need it most.
Founded in 2006, Enphase has shipped over 84 million microinverters and has deployed more than 5 million systems across 160 countries. Combined with award-winning smart batteries, Enphase offers one of the industry’s most reliable clean energy systems, making it a leader in solar technology.
Yes. Enphase IQ Microinverters are compatible with bifacial solar panels because they work at the panel level and convert DC to AC directly at the module. This means they can handle the variable output from bifacial panels efficiently, ensuring optimal energy harvest from both sides of the panel.
Under NEM 3.0, solar-only systems typically reduce electricity bills by 45–50%, while solar-plus-battery systems reduce bills by 70–80% for the same home. The Enphase IQ Battery automatically stores your midday solar production and discharges it during peak hours, where the greatest savings occur under California's current billing structure.
The average solar payback period in California is 6–8 years, with batteries helping reduce that payback period by 1–2 years by avoiding high evening electricity rates. After payback, your electricity is essentially free for the remaining 15–20 years of the system's life. The modular design from Enphase also means you can start with solar and add an IQ Battery later without replacing any equipment.
Peak hours run from 4 pm to 9 pm, when electricity prices can exceed 70 cents per kWh for PG&E, SCE, and SDG&E customers on TOU plans. An Enphase IQ Battery charges itself on free solar during the day and automatically discharges during these expensive evening hours—the AI Optimization profile in the Enphase App handles this entirely automatically, no manual scheduling needed.
