Earlier quoted context omitted.
If you are already connected to the grid, then you can simply just feed the electricity back into the grid when over-producing (which is tracked by your meter), and then use electricity from the grid at night. This actually works in your benefit if you have solar panels, because electricity prices are higher during the middle of the day (more demand). So you can "sell" daytime electricity (at high prices) [1], and th…
Except that, as pointed out above, the utilities only pay the wholesale rate for the electricity they buy back from you, and sell the overage to your neighbors for full price. Meanwhile, you're likely losing money selling your peak day electricity for 5 cents and buying it back for 15.
This is important with solar system sizing, because not only don't you want to be a net exporter of energy, the lower tiers of PG&E's energy rates are very cheap so you don't want to generate that power either. You really only want to offset the high-tier, high-demand electricity you use (or plan to use in the future).
For me it didn't really matter because my energy usage is highest during the peak times of the day, but this is my understanding of how it works. I'll know for sure in a couple of months when I see my bill :)