How to Read Your Electric Bill Before & After Going Solar
When you go solar, your electricity bill is no longer a one-way street between your property and the utility company.
Instead, residential solar energy systems allow homeowners to generate their own electricity and save money by replacing grid-supplied power.
To help you understand your electricity bill before and after going solar, let’s take a look at some of the most important things to know and understand about your energy expenses.
Electric Bill Terms to Know
While every utility in Colorado and Wyoming is a little bit different, electricity bills across the country all share similar terminology. At the most basic level, here are a few terms you should know to understand your electricity bill.
Kilowatt (kW), Kilowatt-hour (kWh) & Usage
A homeowner’s electricity “usage,” refers to the amount of power consumed on the property within a fixed period of time. On your electricity bill, you are likely to see both monthly and annual usage or consumption displayed as “kilowatt-hours.”
Electrical power is rated in watts and a kilowatt is equal to 1,000 watts. A kilowatt-hour (kWh) is a measurement of the actual electrical energy consumed over one hour.
For example, if you have a 1,000-watt (or 1 kW) microwave, it would take exactly one hour of runtime to consume 1 kWh of electricity. Likewise, a 50-watt light bulb would need to run for about 20 hours (50W x 20h = 1000Wh) to equal one kWh of electricity consumption.
Average residences in Colorado use about 9,000 kWh of electricity per year or roughly 750 kWh per month.
Off-Peak and Demand Charges
Within a demand or time-of-use billing structure, electricity rates vary based on the exact moment a home consumes energy on-site. Generally reflected in a utility bill as either “on-peak” or “off-peak,” customers are charged more for their electricity when demand is at its highest, or peak, in a utility's service area.
Using smart energy management, homeowners can save money on demand charges by only using high-power-consuming appliances in off-peak hours. While this is often easier said than done, solar energy systems generating afternoon electricity can help homeowners use more of their own power during periods of high demand.
Learn about how solar customers benefit the most in time of use billing.
Smart Meters, Net Metering, and Customer Production
Whenever you install a solar energy system, a smart meter will replace the traditional utility meter on the side of your home. With “net metering” your electricity usage will be measured directly against your solar energy system’s production to result in a “net” energy consumption for which you will be billed.
Solar energy production may show up on your electricity bill using one of several terms such as “customer production,” “customer energy generation,” or something similar. If your net metered solar panels produce more energy than you consume in a single month, you may even have a “negative” electric bill with energy credits that roll over into the next billing cycle.
To clear up some of the most important ideas about solar electric bills, here are the answers to a few of the most frequently asked questions we hear every day.
Do you still have an electric bill with solar panels?
Yes, you will still have an electric bill with solar panels, as grid-tied systems are directly interconnected with the local utility. While you will be charged for any electricity that is consumed on-site beyond the production of your solar panels, there are also some fees and costs that cannot be avoided. As an example in Colorado, Xcel Energy charges fees for Facility, General Rate Schedule Adjustment (GRSA), and Renewable Energy Standard Adjustment (RESA) for solar customers.
Meter connection fees also affect bill payers with solar panels, which is a charge for grid interconnection. Also known as "service" or simply "customer" fees, some utilities allow meter connection fees to be mitigated with excess solar production.
How do solar panels affect electric bills?
Under a net metering agreement, solar panel electricity production is directly reflected in electric bills as credits toward total consumption and cost. Instead of paying for every kWh of electricity that a property consumes, solar panels lower energy bills by generating electricity onsite, feeding it into a home, and sending the excess energy production into the power grid.
Does solar really lower bills?
Yes, solar can really lower electricity bills for homes and businesses. If you are interested in learning more about the solar potential of your property in Colorado or Wyoming, please feel free to contact Apollo Energy today for a free consultation.