Understanding Your Solar Energy Bill: How Solar Billing Works

If you’ve recently switched to solar, you might have found yourself a little confused by your solar energy bill. It’s completely normal, as there are several factors that can make solar billing tricky to understand. Between how your system interacts with the grid, how utilities track your energy use, and how credits or charges are applied, it can be a lot to wrap your head around. 

But, understanding solar energy billing is key to avoiding surprises and maximizing your savings. With over a decade of solar energy experience, GreenLancer is here to help you navigate the complexities of your solar bill.

How Solar Billing Works: The Basics

The energy your system generates is used first to meet your home’s electricity needs, reducing how much you pull from the grid. If your system produces more energy than you use, the excess is sent back to the grid. In return, you may earn credits or compensation, depending on your utility’s net metering policies.

Smart meters play a key role in this process by tracking both how much energy your solar system produces and how much electricity you consume. This data helps utilities accurately calculate your solar energy bill. 

Here’s an overview of solar billing:

• Your solar system powers your home during the day.

• Any excess electricity produced is exported to the grid.

• You may be credited for the surplus energy, depending on your local utility plan.

Net Metering and Solar Energy Billing

Net metering or net energy metering is a billing arrangement that allows solar panel owners to receive credits for the excess electricity their systems generate and send back to the grid. This system helps homeowners offset their energy costs by providing compensation for power that would otherwise be purchased from the utility. 

Net metering policies can vary significantly from state to state and even from one utility to another, which can affect how much credit you earn and when. It is critical to understand the net metering programs in your area to understand your solar energy bill.

How Net Metering Impacts Your Solar Electric Bill

Under net metering, the electricity your solar system generates during the day is sent to the grid if you don’t use all of it in your home. The utility tracks this excess energy and credits your account for the amount exported. 

The credit system can either be based on kilowatt-hours (kWh) or monetary credits, depending on the state and utility. For example, California typically offers full retail-rate net metering, meaning you’re credited at the same rate you pay for electricity. In contrast, some states, like Nevada, offer avoided-cost compensation, which is a lower credit rate based on the utility’s cost to generate power.

Variations in Net Metering & Solar Billing Policies

Your solar energy bill depends on how your utility handles solar billing and net metering. Different policies affect how you earn and use credits for the electricity your solar panels send to the grid. 

Understanding these differences helps you make sense of solar panel billing and optimize your savings. Review your utility’s net metering rules to better grasp how to read your solar electric bill and ensure you're maximizing your benefits.

• Full Retail-Rate Net Metering vs. Avoided-Cost Compensation

  Some utilities offer full retail-rate net metering, meaning every kilowatt-hour (kWh) you export offsets a kWh you use later at the same rate. Others provide avoided-cost compensation, where excess energy is credited at a lower rate based on wholesale electricity prices. This affects how much you save on your solar electric bill each month.

  
  

• Monthly vs. Annual Rollover of Credits

  Depending on your net metering agreement, unused solar credits may roll over month to month or reset annually. If your utility allows annual rollover, you can bank excess credits for higher-usage months. Without it, you may lose some credits, impacting your solar bill explained in your statements.

  
  

• State and Utility Program Differences

  Net metering policies vary widely. Some utilities provide one-to-one crediting, where exported energy offsets consumption at the same rate. Others apply lower compensation rates, meaning you receive less value for excess energy. These factors influence your understanding of your solar bill and how much you save over time.

Alternatives to Net Metering & Solar Billing Options

If your utility doesn’t offer full net metering, your solar energy bill may be impacted by alternative compensation programs. Understanding these options helps you make the most of your solar billing and maximize savings.

• Feed-in Tariffs (FITs) vs. Net Metering

  Instead of offsetting your energy use, feed-in tariffs (FITs) pay a fixed rate for each kilowatt-hour (kWh) your system exports to the grid. Unlike solar panel billing with net metering, FITs don’t allow you to use those credits later, but they provide steady compensation, often at rates set by regulators.

  
  

• Distributed Generation Policies

  Some states and utilities support distributed generation, where homeowners sell excess solar power to the grid but may face limits on compensation rates or system size. These policies influence your solar bill and how much return you get on exported electricity.

  
  

• Time-of-Use (TOU) Rates & Solar Optimization

  TOU rate structures charge different electricity prices based on demand. Peak hours (late afternoon/evening) cost more, while off-peak hours (overnight/midday) are cheaper. How to read your solar electric bill under TOU means shifting high-energy tasks—like running appliances or charging an EV—to daylight hours when solar production is highest.

  
  

• Buyback Programs & Compensation Variations

  Some utilities offer buyback programs, where they purchase excess solar energy at different rates, often lower than retail prices. This can affect your solar bill since compensation varies based on wholesale electricity rates or specific program terms.

Understanding Time-of-Use Rates and Solar Billing

TOU billing changes how you're charged and credited for electricity based on the time of day. Instead of a flat rate, electricity prices fluctuate depending on demand.

What Is TOU Billing?

TOU billing breaks the day into different pricing periods:

• Peak Hours – The highest rates, usually in the late afternoon and evening when electricity demand is at its highest.

• Off-Peak Hours – Lower-cost electricity, typically during midday and late at night.

• Super Off-Peak Hours – The cheapest rates, often in the early morning when demand is lowest.

How TOU Plans Affect Solar Savings

Your solar bill and savings depend on when you use and export energy:

• Exporting Solar Power at Peak Rates – If your system sends excess energy to the grid during peak hours, you'll earn higher credits.

• Pulling from the Grid at High Rates – Using grid electricity during peak times can increase costs.

• Battery Storage Optimization – Storing solar energy during the day and using it in the evening helps avoid high rates.

Common Fees and Charges on a Solar Energy Bill

Even with solar, your solar energy bill will likely include fixed costs that aren’t offset by your system’s production. Not all solar energy system owners will encounter every fee listed below; the charges you face largely depend on your utility provider's policies and regional regulations. 

Here’s what to look for when reviewing solar billing:

• Basic Service or Connection Fees – Most utilities charge a fixed monthly fee, typically ranging from $5 to $30, to maintain grid access, even if your solar system meets all your energy needs.

• Minimum Monthly Charges – Some utilities require a baseline payment regardless of solar production, often between $10 and $25 per month, ensuring all customers contribute to grid maintenance.

• Non-Bypassable Charges – These are mandatory fees for grid upkeep, energy efficiency programs, or public policy initiatives. They usually range from $0.01 to $0.04 per kilowatt-hour (kWh) of grid electricity used, and solar credits cannot offset them.

• Grid Access Fees or Standby Charges – In some states, utilities impose additional charges on solar customers to cover grid infrastructure costs. These can vary from $5 to $50 per month, depending on system size and local policies.

How to Read Your Solar Energy Bill

Understanding your solar energy bill helps you track savings and avoid surprises. Here’s how to break it down:

Finding Net Metering Credits

Look for a section that shows solar billing credits for excess energy sent to the grid. Depending on your utility, credits may roll over monthly or annually. Some utilities provide one-to-one crediting, while others offer a lower avoided-cost rate for exported power.

Identifying TOU Pricing Impacts

If you’re on a time-of-use billing plan, your bill will show different rates for peak, off-peak, and super off-peak hours. Maximizing solar use during peak times and running appliances during off-peak hours can increase your savings.

Checking for Unexpected Charges

Some utilities include minimum monthly charges, non-bypassable fees, or grid access charges that aren’t offset by solar credits. Review these line items to understand how they affect your total bill.

Calculating Your True Solar Savings

Compare your pre-solar and post-solar bills by looking at total energy costs and net payments. Keep in mind that billing cycles and seasonal changes impact solar production—higher summer generation may offset winter deficits.

Strategies for Maximizing Savings with Solar Billing

Understanding solar billing can help you maximize savings by adjusting your energy usage and leveraging available incentives. Your strategy will depend on factors like net metering policies, time-of-use (TOU) rates, and battery storage options.

Shift Electricity Usage to Align with Solar Production

If your utility offers full retail net metering, excess solar energy earns credits at the same rate you pay for electricity, making energy shifting less critical. However, if you're compensated at a lower avoided-cost rate, self-consuming more of your solar power increases savings. 

Try these strategies:

• Run energy-intensive appliances—washing machines, dishwashers, and electric water heaters—during peak solar hours instead of in the evening.

• If you lack full net metering, use excess daytime generation instead of sending it back to the grid at a lower rate.

• Smart home automation tools can help schedule devices to operate when solar production is highest.

Optimizing Energy Storage for Solar Bill Savings

If you're on a TOU billing plan, a solar battery can help you avoid high electricity costs:

• Store excess solar energy during the day and use it during peak evening hours when grid rates are highest.

• Reduce grid dependence during times when utilities charge higher demand fees or non-bypassable charges.

• Self-consumption through storage can be more cost-effective than exporting power if your utility offers lower compensation rates for solar exports.

Maintaining Your Solar System

Keeping an eye on your system’s performance ensures you’re getting the most out of your investment:

• Use monitoring apps from your inverter manufacturer to track your system’s solar production in real time. If your solar monitoring system isn’t working properly, check out our guide to resolving solar monitoring issues.

• If there is an unexpected decline in solar energy production that you can’t correct, contact a professional to inspect your system. GreenLancer connects you with experts for solar repairs to diagnose and fix issues, ensuring your system operates at peak efficiency.

Get in touch with us at (866) 403-0925 or fill out the form below to get started.

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When to Contact Your Utility or Solar Installer

Your solar energy bill should accurately reflect your system’s performance and billing policies. If something seems off, it’s important to reach out to the right party for clarification or corrections.

• Net metering credits missing or incorrect – If you aren’t receiving the expected credit for excess solar energy sent to the grid, contact your utility provider to review your solar billing details.

• Unexpected fees or charges – Some charges, like minimum monthly fees or TOU rate adjustments, are normal, but if you notice unexplained costs, ask your utility for an itemized breakdown.

• Monitoring data doesn’t match your bill – If your solar monitoring app shows higher energy production than what your bill reflects, your solar installer can check for system issues, while your utility can verify meter accuracy.

Choosing a Professional Solar Repair Service

If your original solar installer has closed down, you may need to find a qualified technician for system repairs or monitoring issues. Choosing a professional with solar industry certifications, such as NABCEP (North American Board of Certified Energy Practitioners), ensures your system is serviced by a knowledgeable expert.

GreenLancer, a trusted name in the solar industry since 2013, connects homeowners with experienced professionals for solar repairs, system inspections, and troubleshooting nationwide. Whether you need help diagnosing solar panel monitoring issues or ensuring your system is performing efficiently, GreenLancer makes it easy to find the right experts for the job.