post updated 8/4/2021
Your community’s utility has a big impact on how solar will look for your home or business.
Because your solar PV system will likely be tied to the grid, it is important to know how your home’s electricity interacts with your utility. Being grid-tied means that you take energy from the grid as you need energy, and give back to the grid when your solar array is producing extra energy.
Most installations in the United States are grid tied, including most battery systems. Off-grid systems are expensive due to the amount of batteries needed to store enough energy to run your home. Additionally, you would need more solar panels to keep those batteries charged. That combination is difficult to achieve, and too costly for most homeowners.
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
While your parallel solar PV system provides tangible value to the grid, you are also still using the power infrastructure to some degree. Therefore, no matter how much or how little energy you use, utilities will always have a base fee to cover these baseline costs. Expect to pay for these baseline costs through the same fixed fee as those without solar pay.
Solar reduces your utility bill because your home will use less energy from the grid by accessing the sun’s energy for your home’s energy consumption . Utilities monitor the amount of electricity, called kilowatt hours (kWh), that you use via your electric meter. Each kWh has a certain rate and delivery charge. The amount of energy you use and type of customer (residential or commercial), can affect how much you are charged. Your utility multiplies these rates by the amount of kWh consumed over the course of a month to determine the cost of your electricity bill. Local and state taxes are added to get the total amount billed. 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 (IOUs): These are largely guided by state policies and local public oversight committees.
- Rural Electric Cooperatives: Rural cooperatives are managed by elected co-op boards.
- Municipal Electric Utilities: These 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.
Net metering is a common policy provided by with large Investor Owned Utilities. 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 kilowatt hours (kWhs) leaving your home. When your solar system is not producing, like at night, you will use electricity from your utility. The kilowatt hours exported to the grid during the day are credited to your bill for your use at nighttime.
The goal is to net zero kWhs by producing as much energy as you use on a monthly or annual basis. Additionally, with net metering you “true-up” at some point, which means that the utility will reconcile your kilowatt hour credits and debits every billing cycle. Utilities may have monthly, quarterly, or annual “true-up” periods. 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.
The net metering policies of Municipal and Cooperative utilities vary widely. For these utilities, we strategize with the customer to determine the most appropriate system size that optimizes 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 can fill you in on 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 can give you the details on going solar in your 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 use as much energy. Below are examples of energy bills so you can get a picture of what they may look like. Learn more about how net metering works on your utility bill in this webinar recording.
Ameren IL bill source here.
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 your review so you can decide if solar is right for you.