SMUD vs PG&E: Which Utility Is Better for Solar, Heat Pumps, and EVs in 2026?

If you live anywhere in Northern California, you've probably had the thought: my neighbor pays half what I pay for electricity. Why?

The answer almost always comes down to one thing. They're on SMUD and you're on PG&E, or vice versa. The two utilities serve overlapping parts of the Sacramento region and beyond, but they operate under completely different structures, charge dramatically different rates, and treat solar, heat pump, and EV customers in ways that can swing your annual bill by thousands of dollars.

This guide breaks down exactly how SMUD and PG&E compare in 2026, plan by plan, with real numbers. If you're deciding whether to invest in solar, electrify your heating, or buy an EV, the utility you're stuck with should shape that decision.

The Big Picture: Why the Rates Are So Different

SMUD is a community-owned, not-for-profit utility governed by an elected board. It serves roughly 1.5 million people in Sacramento County and a small portion of Placer County. Because it doesn't answer to shareholders, every dollar collected goes back into the grid or stays in customers' pockets.

PG&E is an investor-owned utility serving most of Northern and Central California, including the Bay Area, the Central Coast, and the suburbs ringing Sacramento like Roseville, Folsom, and parts of Elk Grove. It has shareholders to pay, a massive wildfire liability burden, and a service territory that spans some of the most expensive grid infrastructure in the country.

The result: SMUD's residential rates run roughly 50% lower than PG&E's on an average bill basis. That's not a rounding error. That's the single biggest factor in your annual electricity cost if you live near the line between the two service areas.

PG&E has been actively reducing rates in 2025 and 2026, with bundled residential electric rates now down 13% from January 2024 for standard customers and 23% for CARE customers. Even with those reductions, the gap with SMUD remains significant.

Residential Rate Plans Compared

SMUD's Standard Plan: Time-of-Day (5-8 p.m.)

This is the default for every SMUD residential customer. The structure is refreshingly simple. Peak hours are weekdays from 5 to 8 p.m. Everything else, including all day on weekends and holidays, is off-peak.

For 2026, the rates look like this:

The summer peak rate is the painful one, but it only applies for three hours on weekdays. If you can shift your dishwasher, laundry, and EV charging to after 8 p.m. or before noon, you avoid it entirely.

SMUD also offers a Fixed Rate plan that costs about 4% more on average than the Time-of-Day plan in exchange for predictability. A new optional Time-of-Day (Low Use) rate is available in 2026 for customers with panels 125 amps or smaller who use minimal electricity.

PG&E's Standard Plan: E-TOU-C

PG&E's default residential plan is E-TOU-C, a tiered time-of-use plan with peak pricing every day from 4 to 9 p.m., including weekends. That's a five-hour daily peak window with no weekend break, compared to SMUD's three-hour weekday-only window.

PG&E also offers a tiered plan (E-1) where the price depends on how much you use rather than when. Tier 1 stays within your baseline allowance (50–60% of average regional usage), and Tier 2 kicks in above that, jumping by over 25%.

For electrified homes, PG&E offers E-ELEC, which is required for customers with solar under NEM 3.0 and is also available for households with EV charging, battery storage, heat pump water heaters, or heat pump HVAC. E-ELEC tends to offer the lowest usage rates for high-load homes.

Which Utility Wins for Solar Customers?

This is where the difference gets significant.

PG&E and NEM 3.0: If you install solar in PG&E territory today, you fall under the Net Billing Tariff (commonly called NEM 3.0), which pays you avoided-cost rates for exported energy rather than the full retail rate. Export credits dropped roughly 75% compared to the old NEM 2.0 program. PG&E does offer an ACC Plus adder for customers who sign up early, currently 0.88 cents per kWh for standard customers and 3.6 cents for CARE/FERA customers, for nine years after enrollment. Solar customers are placed on E-ELEC by default.

The economic implication: PG&E solar without battery storage has a much longer payback period than it did three years ago. Solar plus battery is now the standard recommendation because batteries let you self-consume your generation during peak hours rather than exporting it cheaply and buying it back expensively.

SMUD and Solar: SMUD's Solar and Storage Rate (SSR) program offers different mechanics. SMUD customers with solar installed after January 2018 are required to be on the Time-of-Day rate. The math typically still favors solar in SMUD territory, but because base rates are already so low, the absolute savings per kWh generated are smaller than in PG&E territory. The flip side: payback periods are shorter because installation costs are similar but you're displacing cheaper grid power, which sounds counterintuitive until you remember that the avoided-cost rate gap matters more than headline retail rates.

Bottom line for solar: PG&E customers have more to gain from solar in absolute dollars because they're displacing $0.35–$0.50/kWh peak rates. SMUD customers have an easier payback math because installation costs the same but the comparison is against already-cheap power. If you're a PG&E customer, you almost certainly need a battery to make NEM 3.0 economics work.

Which Utility Wins for Heat Pump Owners?

Heat pumps shift your heating load from gas to electricity, which means your electricity bill goes up while your gas bill drops or disappears. The question is whether the swap saves money, and the answer depends heavily on which utility you're on.

PG&E heat pump customers benefit from the E-ELEC plan, which is specifically designed for electrified homes. E-ELEC has lower per-kWh rates than the standard tiered plan, especially in off-peak hours, which is when heat pumps run hardest during winter mornings. The combination of E-ELEC pricing plus the high cost of PG&E natural gas means heat pumps often save money even with electricity being expensive.

SMUD heat pump customers benefit from the already-low time-of-day rates. SMUD's winter off-peak rate of $0.1285/kWh is roughly half what PG&E customers pay in equivalent periods. Heat pump operating costs are dramatically lower here, and SMUD also runs robust heat pump rebate programs through its Home Performance Program.

Bottom line for heat pumps: SMUD customers see the cleanest economics. PG&E customers still benefit, especially when paired with the E-ELEC plan, but the case is more sensitive to your home's insulation, climate zone, and existing gas appliances.

Which Utility Wins for EV Owners?

EV charging is where the rate plan choice matters most because you're adding 200–400 kWh of monthly load that you fully control the timing of.

PG&E EV plans: PG&E offers EV2-A, designed for households where the EV shares a meter with the rest of the home. The structure is straightforward: off-peak rates apply from midnight to 3 p.m., partial-peak from 3–4 p.m. and 9 p.m. to midnight, and peak from 4–9 p.m., every day including weekends. As of March 2026, EV2-A includes the new Base Services Charge (~$24/month) paired with lowered per-kWh prices. If you exclusively charge overnight or in the early afternoon, you only see the off-peak rate. PG&E also offers EV-B for households with a dedicated EV meter, though this requires a separate installation and isn't eligible for CARE, FERA, or Medical Baseline discounts.

SMUD EV discount: SMUD doesn't have a separate EV rate plan. Instead, EV owners stay on the standard Time-of-Day (5–8 p.m.) rate and get an additional 1.5¢ per kWh credit on all electricity used between midnight and 6 a.m., every day, all year. To qualify, you register your plug-in EV with the DMV using the same service address as your SMUD account. Combined with the already-low overnight off-peak rate ($0.1285/kWh in winter, $0.1550/kWh in summer), this makes overnight EV charging in SMUD territory remarkably cheap.

Bottom line for EVs: SMUD wins decisively on price-per-mile if you charge at home overnight. The combination of low base rates plus the 1.5¢ midnight-to-6 a.m. credit is hard for PG&E to match even on EV2-A's best off-peak window.

What About Rebates and Programs?

Both utilities offer rebate programs for heat pumps, induction cooking, EV chargers, and battery storage, but the structures differ.

SMUD's incentives are generally simpler to access and stack well with federal tax credits. Programs include rebates for heat pump HVAC and water heaters, EV charger installation credits through the Charge@Home program, and a Home Performance Program that covers multiple upgrades.

PG&E's rebates are administered through several overlapping programs including the Energy Savings Assistance Program for income-qualified customers, TECH Clean California for heat pumps, and various third-party administrators for specific equipment categories.

Both utilities allow stacking with federal Inflation Reduction Act tax credits, including the 30% residential clean energy credit for solar and the 25C credit for heat pumps and electrical panel upgrades.

The Honest Recommendation by Use Case

If you have a choice (most people don't, but some live near the boundary), here's the straightforward call:

• For an all-electric home with EVs and solar: SMUD wins on operating costs almost universally. The lower base rates mean every kWh you consume is cheaper, and the rebate stack is easier to navigate.
• For a heavy daytime energy user without solar: SMUD's lower off-peak rates and shorter peak window are significantly more forgiving than PG&E's all-day 4–9 p.m. peak.
• For a household considering solar today: PG&E customers face worse export economics under NEM 3.0 but bigger absolute savings because retail rates are so high. Battery storage is essentially required for new PG&E solar installations. SMUD solar still makes sense but the payback math is closer to break-even on a pure cost basis.
• For a low-usage household that mostly uses electricity in the evening: PG&E's tiered E-1 plan can sometimes beat its TOU plans if your usage stays within Tier 1, but SMUD will still likely be cheaper overall.

The most important point: you can switch rate plans within each utility. Most customers default to whatever plan was set when they signed up, but a quick analysis of your last 12 months of usage often reveals a better-fit option. PG&E's customer portal will suggest alternatives. SMUD's website includes a rate comparison tool.

A Note on Rate Changes

Both utilities have implemented rate changes in 2026. SMUD's board approved a 3% rate increase for both 2026 and 2027, adding roughly $4.35 per month to the average residential bill in 2026. PG&E has lowered rates four separate times since January 2024 while introducing the new Base Services Charge structure in March 2026.

Rate plans, baseline allowances, and rebate programs change regularly. Always verify current rates on the utility's official site before making a major investment decision.