Net Metering: Reading your electric bill after going solar
By: Matt McPherson
I believe that the utility companies employ special cryptic coders to make reading your electric bill as difficult as possible. The idea being that you will just give up trying to understand your bill and pay it. This goes for all utility bills before solar or after. I would like to focus on the after solar bill or what is called the Net Metered electric bill.
Once you have gone solar you are transitioned to an annual net metered billing program. What this means is that instead of simply consuming power from the utility you are now able to generate your own power as well. Once you’re net metered, your utility meter will spin in two directions. It spins forward when you are using power from the grid, and it spins backward when you are generating more power from your solar panels than your home is using at that time.
At the end of each billing cycle, typically a calendar month, your utility will subtract the amount of kWh’s (kilowatt hours) generated by the solar system from the amount of kWh’s you consumed and arrive at your net energy consumption. It is very possible that some months you will actually have a credit or surplus of kWh’s generated. This will be represented on your bill as a negative number (-100 kwh, for example). This means that you generated more power from your solar system than you used. Those credits get tallied up and go toward offsetting months when you have a balance due or you used more power than you generated.
At the end of your 12 month net metering cycle, the total consumed kWh amount is tallied up and your utility charges you for that power. One of the best parts of going solar is that instead of paying for the upper electricity tiers (typically tiers 3, 4, & 5) these are the first tiers eliminated by your solar system. Your solar energy system then leaves you with the least expensive tiers (if any) to pay and typically only during the winter months.
When you are a net metered customer you are not charged for the power you consume each month. This energy is tallied up and you ‘true up’ once per year. You will still receive a statement every month from your utility company informing you how much power you consumed or generated for that particular month and what your running year to date amount is.
This brings me back to the cryptic billing format created by the utility company. In true utility bill fashion, the actual amount due or the ‘year to date’ amount is found in small print on the back of the 4th page of the bill. The first page of the utility bill shows taxes owed, which are distribution and utility taxes from the state that cannot be rolled over to the end of the year. These taxes are usually in the $1.10 – $1.90 range and are what most net metered customers see and mistakenly expect to pay. What I typically find is that my customers never get to the 4th page to see their true ‘year to date’ amount due. They typically read the first page and see that they owe very little which is actually only the taxes due and just throw the bill onto the stack or shred it. This tends to be a big problem at the end of the 12 month cycle when the utility company “true up statement” arrives in the mail. The true up statement will come in the mail a month before your 12 month solar activation anniversary each year. If you have only been reading the first page of your bill every month this true up statement can be a real shocker.
The lesson to be learned here is that reading your utility bill can be tricky. If you have any questions, it’s advised that you consult a solar professional concerning your solar offset. The goal for most solar panel systems is to offset 75%-85% of your overall usage to keep you in the bottom tiers for the entire year. This will reduce your true up statement at the end of the year to the smallest bill possible since you’ll only be paying the cheapest electricity tiers. Don’t be naïve and think that you are only going to pay $1.00 per month in taxes for your power used unless your solar system is offsetting 100% of your power consumed. In that case congratulations!
If you have any additional questions please contact me at [email protected]