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Your Utility Bill After Solar

Utility bills are hard enough to understand. So much so that most of us just pay them every month without much thought for the details. But all that changes when it comes time to go solar. The ability to decipher your utility bill after solar requires some knowledge of what it looks like before making the move. It will also help in maximizing energy efficiency and system benefits.

Any utility bill will be full of detailed and confusing information. Specific charges and fees will vary based on your location and utility. The actual amount you are paying for electricity usage is divided into two rate categories: baseline usage and non-baseline usage.

  • Baseline usage is the amount of electricity in kilowatt-hours that the utility company expects a household to use in a month. Considering that usage below this baseline is the cheapest electricity you can buy, expect your utility to underestimate.

  • Non-baseline usage is electricity usage above and beyond the utility-set baseline. Typically thresholds are set as usage continues to rise above the baseline. The further from the baseline you get, the higher rates you pay for electricity.

In time-of-use scenarios, you must take into account peak hour and off-peak hour rates as well. Peak hours occur during the day, typically from around noon to six o'clock in the evening, and electricity rates are considerably higher during these hours due to peak demand. The difference between peak and off-peak rates can be staggering. Fortunately, after a solar system is installed, a time-of-use agreement with the utility can be very beneficial because peak hours are also when your solar system is working at peak output.

Now that your solar electric system is installed, grid-tied, and net-metered your utility bill will have a slight change of face. First of all, if your gas and electric bills were combined before, you will now have two bills coming from the power company. The bill addressing electricity is often called the Net Energy Metering or Net Metering bill. It will have a similar look to your old electric bill but for one thing. Thanks to that bidirectional meter that was installed when your system was wired into the grid your bill, will now have two columns: electricity consumption and production. Both columns will be summed up, with production subtracted from consumption. The difference between the two will be either...

  1. Positive: You owe money to the utility or

  2. Negative: The utility owes you money or a credit on next month's bill

Because most net metering rules involve the utility crediting your account until the end of the year, these net metered bills can often be settled up at that time. In other words, you don't have to pay monthly, just the difference at year's end.

No matter how you slice it, a solar electric system will cut your utility bill significantly, and that is the most important thing to remember: After you go solar your utility bill will shrink. And the more you cut down on your electrical usage the more money you'll save.

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