What happens with my utility when I go solar?
post updated 6/7/2021
The utility that serves your community has a big impact on how solar will look for your home or business.
It is important to know how you and your utility will interact if you choose to go solar because your solar array will most likely be grid tied. This means that you will take energy from the grid as you need energy, and give back to the grid when your solar array is producing extra energy.
Most of the installations in the United States are grid tied, including most battery systems. There are only a few completely off-grid systems. This is because the costs are significant due to the amount of batteries you need to store enough energy to offset your energy usage for the building. Additionally, you would have to have enough solar panels to keep those batteries charged. That combination is difficult to achieve, and expensive.
Now that you know that your relationship will continue with your utility, let’s talk about how you interact with your utility with solar.
Using the Grid
When you go solar you are most likely still using the grid. While your parallel energy generation system provides real tangible value to the grid, you are also still using the power infrastructure to some degree. Because of this, no matter how much or how little energy you use, utilities will always have a base fee to cover these baseline costs. Therefore, if you go solar you can still expect to pay for these baseline costs through the same fixed fee as those without solar pay.
Your utility bill is reduced with solar because you will be using less energy from the grid. Utilities bill you by monitoring the amount of electricity that you use via your electric meter. The units of electricity energy are called kilowatt hours (kWh). Each kWh costs a certain rate and has a delivery charge. Depending on the amount of energy you use, and whether you are a commercial or residential customer, can affect how much you are charged. Your utility multiplies these rates by the amount of kWh you use over the course of a month to get the cost of your electricity bill. At that point, they will also add local and state taxes to get the total amount that you owe them in addition to the base utility cost. The goal with solar is to lower your kWh as much as possible to offset your utility usage.
How do utility policies influence my savings and return on investment?
Each utility has different policies when it comes to solar, which can make it a little confusing to understand. Three different kinds of utility models exist: Investor Owned Utilities, Rural Electric Cooperatives, and Municipal Electric Utilities. Investor Owned Utilities (IOUs) are largely guided by state policies and local public oversight committees. Rural cooperatives are managed by elected boards. Rural cooperatives also have to follow state law, but typically not as much is asked of them because they are operating at a smaller scale. Municipal utilities are managed by the city’s governing body like a board of aldermen or city council. Because there are so many stakeholders that make policy for utilities almost all of them have different ways they manage solar in their territory.
A common policy that you will see with large state owned utilities is net metering. Once you decide to go solar the utility will install a bidirectional meter if you don’t already have one in place. When your solar system is producing more electricity than your home can use at one time, the electricity will leave your home and go out to the grid. Your meter will register the number of energy units (kilowatt hours, kWhs) leaving your home. When your solar system is not producing the amount of energy you need to power your home, like at night when the sun is not shining, then you will use electricity from your utility. The meter will likewise register the kWhs you produced during the day and exported to the grid. The goal is to net zero kWhs by producing as much energy as you use on an annual basis. Additionally, with net metering you “true-up” at some point, which means that the utility will reconcile your kwh credits and debits every billing cycle. Utilities may have monthly, quarterly, or annual “true-up” periods and Your utility account will be credited for surplus energy exported to the grid either at the retail rate, supply rate, or wholesale rate as determined by your local utility and the regulations it must follow.
Municipal and Cooperative utilities have widely varying net metering policies. For these utilities we strategize with the customer on a case by case basis to determine the most appropriate system size that will optimize customer’s energy production and financial savings.
Luckily for you, StraightUp Solar professionals are incredibly knowledgeable about utility policies throughout Missouri and Illinois. If you want to look at solar for your home we will let you know about your utility policies. We will also map out what your month by month costs and savings will look like. Alternatively, you can reach out to the utilities themselves to ask them about their policies. They are also incredibly knowledgeable and will be able to give you the details of what it would look like to go solar in their jurisdiction.
What will my utility bills look like after solar?
You will still have a bill each month and it will show how many kWh you have used and produced. Most likely you will use some amount of energy from the grid and you will not have 100% offset. However, you should be charged quite a bit less given you will not be using as much energy. Below is an example of a bill from one of our Project Developers that has solar on his home so you can get a picture of what it looks like. Learn more about how net metering works on your utility bill in this webinar recording.
What’s next if I want to look into solar and get a full projection of my cost savings?
Now that you know that your utility is going to be part of your life for the long haul you can start your solar exploration. Fill out the form below and StraightUp Solar will get in touch with you to answer any other questions you may have about your utility in Missouri or Illinois. We will provide a full home assessment and proposal for you to review so you can decide if solar is right for you.
Ready to look into solar for your home?
Reach out via the form below. A Solar Support Specialist will reach out to get you started on a free solar assessment of your home.