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How Do Solar Panels Work With Your Electric Bill?

With solar, any electricity that your home generates and immediately uses offsets kilowatt-hours pulled from the grid. This is what makes your utility bill lower with solar! However, how your utilities charge for and credit electricity varies across states and regions.

However, how your utilities charge for and credit electricity varies across states and regions. For example, Solar power users in New York pay a monthly Customer Benefit Contribution.

We’ll talk about how do solar panels work with your electric bill and and how you can use them to save money.

Four Reasons You’ll Still Have an Electric Bill with Solar Panels

Unless your home is completely off the grid, you will still receive an electric bill every month. This is rare and expensive.

Many people mistakenly believe that installing solar panels will eliminate their electric bill entirely. Although you use solar power, you will still get a bill for four main reasons:

1. Overcast Days and Nights

Solar panels need sunlight to produce electricity. Not sunny every day, the sun sets every evening. If you need electricity at night or when it’s cloudy, your home will still rely on the utility grid for power. This means that you cannot solely rely on solar power for electricity during these times.

Understanding that solar power is not a 24/7 power source is important. Make sure to have a backup plan in place for when solar power is not available.

Therefore, most homeowners will still have an electric bill each month, even if their solar panels are working efficiently. Connecting to the grid means you receive solar energy when it’s available and grid energy when it’s not.

2. Utility Service Charges

Homes with solar panels often connect to the utility grid. This allows them to have power even when the panels are not producing enough electricity. This setup, known as “grid-tied,” means you will still receive a utility bill. This bill includes various service charges, regardless of how much electricity you use from the grid.

These charges can include:

  • Service Fee for Customers: This encompasses expenses for meter monitoring, account upkeep, invoicing, and client support.
  • Distribution Fee: This is for the construction and preservation of the electrical distribution network, which includes power cables and transformer facilities.
  • Transmission Fee: This fee covers the cost of moving electricity from the power plant to your home. It is done using high voltage transmission equipment.

3. Solar Battery Storage

Sometimes a solar power system can make more electricity than your home needs, especially when the sun is shining bright. If you have a solar battery storage system, you can save this extra energy for when the sun isn’t out. However, having enough battery storage to power your home for long periods can be expensive. Many people enjoy using battery power while remaining connected to the grid for additional energy when needed.

Without a battery storage system, you can’t use extra energy at night. This means you’ll have to rely on the grid and pay for the electricity you use.

4. Lack of Net Metering

Net metering is a billing system that gives you credit for the excess electricity your solar panels generate and send to the grid. If your solar panels make more electricity than your home needs, the extra energy goes to the utility grid. Your utility company will then give you credits for this extra energy.

The value of these credits varies by utility company and the terms of their net metering program. You can use net metering credits to offset the cost of the electricity you draw from the grid later. If your utility company doesn’t have net metering, you won’t get credit for extra electricity. You’ll have to pay for grid electricity when you need it.

Average Monthly Electric Bill with Solar Panels

Solar panels can lower your electricity bill by a lot, or even eliminate it completely. The amount of savings depends on the size of the system and the net metering policy. However, fixed fees may still apply in some cases. Fixed fees may still apply in some cases. It all depends on how much your solar panel system produces each month.

Many states offer programs like net metering, where homeowners can earn credits for excess electricity generated by their solar systems. These credits are then used to offset the cost of grid electricity during the night and other times when the sun isn’t shining.

The credits show up on a utility electricity bill as negative charges. Homeowners save solar credits in spring and summer. They use these credits in fall and winter. This is when their solar panels produce less electricity. It helps lower their energy bills.

If your solar system doesn’t generate enough energy during the day, you may have higher bills than expected. Incorrect positioning or shading of your solar panels may be causing this issue. The value of your extra solar power can change based on where you live, your utility rates, and other factors.

Your solar installer can help you understand this. They should also be able to recommend an appropriately sized solar system for your home to maximize its potential.

How You Can Lower Your Electric Bill with Solar Panels?

How Do Solar Panels Work With Your Electric Bill

Your solar panels can impact your electricity bills. The amount of power you use and the energy your system produces determine this impact. You cannot control the amount of electricity produced by your solar panels. However, you can reduce your electric bill by following a few steps.

Reduce Your Energy Usage

Using less electricity is key to lowering your electric bill. Here are some simple ways to save energy at home:

  • Use a Programmable Thermostat: This helps your heating and cooling systems run only when needed.
  • Switch to LED Bulbs: LEDs use less electricity and last longer than traditional bulbs.
  • Conduct a Home Energy Audit: This can identify areas where you can improve energy efficiency and reduce costs.
  • Always switch off appliances when you don’t need them to save energy and reduce electricity consumption.

Install Solar Battery Storage

If your solar panels produce more electricity than you use, consider getting solar battery storage. These batteries store the extra energy generated during the day, so you can use it at night or on cloudy days. This reduces the amount of electricity you need to draw from the grid, lowering your electric bill.

Enroll in Net Metering

Net metering lets you send any excess power your solar panels generate back to the utility grid. You earn credits when you generate excess electricity. You can use these credits to reduce the cost of electricity from the grid. This can be especially helpful at night or during bad weather.

Do You Still Have An Electric Bill With Solar Panels?

Yes, you will have an electric bill with solar panels. If you have solar panels, you will still receive an electricity bill. This is because you are still connected to the grid. It doesn’t matter if you own the panels or lease them. The utility company will collect a service fee/charge and taxes on this bill. These charges are non-bypassable, regardless of your energy production.

However, solar customers will also have a section on their bills that shows their net consumption. This is the difference between your home’s total energy use and the energy your solar panels send back to the grid. If your solar panels produce more energy than you consume, your meter will run in reverse. This means you will receive credit for the excess energy generated.

Credits are added to your account depending on the time of day and electric rates set by the utility company. The utility company determines peak and off-peak rates. The time of day also affects when credits are added to your account. The utilities will use these credits to offset any energy charges you have later in the same billing cycle.

You will still have to pay the Customer Benefit Contribution (CBC) charge that all National Grid customers pay. You must pay the Customer Benefit Contribution (CBC) charge like all National Grid customers. This charge is a small part of your electric bill. The energy savings from using solar power can offset this cost. The key is to plan ahead for the long term, so you can save money from the beginning.