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How to Read Electric Bill with Solar Panels Installed on Your Rooftop?

Tim Carter
Written by Tim Carter Last Updated: August 23, 2022

Understanding all those numbers on your bills can be almost impossible, so how to read an electric bill with solar panels on your rooftop? If you have a solar system installed, you might feel lost trying to understand it all.

So let’s see how to read and understand your electric bills if you own a solar panel system or you’re thinking about getting it.

Table of Contents

How to Read Electric Bill with Solar System Installed?

Your electric statement will include two sorts of charges: those for energy used (kWh) and those for demand (peak kilowatts, or kW). Demand is what your solar panels produce, whereas energy is what you use.

On your utility account, the kWh charge represents the quantity of energy you used during the billing month.

The demand charge is a little trickier.

Your solar panels can provide maximum output.

That is the highest amount of power they can produce. We commonly measure this in kilowatts (kW). The highest demand charge for the period will be shown on your account.

So, if your solar panels have a max output of 5 kW and you use 1 kW, your demand is 5 kW.

But if you use 2 kW of energy at that same moment, your demand will be 10 kW.

The demand charge is significant because it is what you will be paid for. It’s not how much electricity you use, but how much power your solar panels can generate.

How Many Sections Do Electric Bills Have?

Most electric bills have four sections you need to understand.

Account details include your account number, the date your utility company issued the bill, and the payment due date.

There’s a section with usage charges where you’ll see how much electricity you used in the month, and any charges for going over your usage allowance.

Fixed charges contain any monthly or yearly charges, such as a service charge or meter rental fee.

The total amount you owe for the billing period, including electricity consumption and fixed costs.

How to Save Money on Your Electric Bill?

Your power cost will be lower if you have solar panels installed.

This is because solar panels generate electricity, which offsets the quantity of electricity you must purchase from the utility provider.

The amount you save on your electric bill will be determined by the size of your solar array, the amount of sunlight received in your area, and your electricity usage.

Reduce your demand charges if you want to save money on your electric bill.

To save money on your electric account, concentrate on lowering your demand costs.

How To Reduce Energy Consumption?

Here are a few suggestions to follow:

  1. Use energy-efficient appliances. Refrigerators, dishwashers, and washing machines consume lot of energy. 
    Look for models that are energy efficient and consume less power.
  2. Install a demand management system. It can help you save money on your electric bill by preventing you from using too much power.
  3. Consider a time-of-use plan. Use energy-efficient appliances and avoid using power-hungry equipment during peak hours to save money on a time-of-use plan. A demand management system may assist you in reducing power use during peak hours.
  4. Reduce your air conditioning usage. Air conditioners are one of the most significant causes of demand charges. During the summer, use fans instead of air conditioners.
  5. Use solar panels with a higher peak output

What Is a Demand Management System?

A demand management system is a device that helps you control how much power your appliances use. It’s a good way to save money on your electric bill because it helps you avoid using too much power.

An electrician will need to come to your home and wire a demand management system into your electrical panel in order to install it. Installation costs vary according to the size of your property and the complexity of your electrical system.

Installation should cost roughly $200.

A demand management system typically costs roughly $10 per month to operate once installed. This fee covers the cost of monitoring your electricity usage and sending you notifications when you use too much.

If you live in a location where electricity is priced by the hour, you can save money by using less power during peak hours. Peak hours are normally from 4 p.m. to 8 p.m. on weekdays.

What To Consider When Looking for Solar Panels with a Higher peak Output?

There are a few things to consider when choosing solar panels with a higher peak output:

  1. A higher wattage panel will produce more electricity.
  2. Larger panels produce more electricity.
  3. Panel efficiency determines the amount of electricity a solar panel produces.
  4. The larger your solar system, the more electricity it will produce.

If you’re unsure how much electricity you’ll need, use a solar calculator. This will assist you in estimating the number of panels required to suit your energy requirements.

“Solar Production” on the Utility Bill

Look for the area on your utility bill that says “solar production.”

This will show you how much electricity your solar panels generate.

Consider the quantity of electricity you consume. If your panels generate more electricity than you consume, you will receive a credit on your account.

This means you’re reselling extra electricity to the grid.

You may also use a solar calculator to figure out how much money you’ll save by going solar.

Simply enter your solar output and energy consumption into the calculator. It will then display how much money you have saved.

You don’t need any special equipment to understand and read your utility statement.

Your solar panels will create electricity, which will offset the quantity you must pay to your utility provider.

The amount you save on your electric bill will be determined by the size of your solar array, the amount of sunlight received in your area, and your electricity usage.

How to Check if Your Solar System is Saving Money?

The key is to understand how your solar system is generating electricity and how that affects your electric bill.

Most solar systems are grid-connected, which means they still draw power from the public utility when the sun isn’t shining.

When your system generates electricity, it compensates for the amount of power you would otherwise have to purchase from the utility.

Your electric company will then bill you for the net quantity of power utilized. This can result in monthly savings of 50% or more in some circumstances.

It’s worth noting that electric rates differ based on where you live. Solar users are sometimes charged a higher rate for power than non-solar customers in specific places.

This is because utilities must recoup the expenses of grid maintenance and backup power.

Before going solar, evaluate electric costs in your area to make sure that going solar is actually cost-effective.

Checking Electric Rates in your Area

Find your local utility company’s website and search for “electric rates” to find the information you’re looking for.

Most companies have a rate comparison chart that indicates the price per kilowatt hour (kWh) for solar and non-solar customers.

Switching to solar is not a good option if the price is higher for consumers with solar panel installations.

However, most companies offer special rates for solar customers, which makes solar an attractive option because these rates are usually lower compared to standard electric rates.

Call your utility company for more information because electric rates differ depending on where you live.

There are a few companies that have some of the lower rates for consumers with solar panel installations:

In Colorado, Minnesota, and Texas: Xcel Energy.
In New Mexico: PNM Resources
In North Carolina: Duke Energy.

Electric rates can change, so compare the rates regularly.

The advantages solar customers have may surprise you:

  1. Solar rebates and incentives offset the cost of turning to solar power.
  2. Net metering allows for surplus electricity generated via solar panels to be sold back to the grid.
  3. Solar renewable energy credits (SRECs), designed to encourage the development of solar energy, can be sold or traded to utility companies.
  4. Solar power purchase agreements (PPAs) under which the utility company agrees to buy solar power from the customer at a fixed rate.
  5. Solar leasing allows solar customers to rent out panels from a third party.
  6. Loans

These are only a few of the benefits that solar power users enjoy. There are many more, so check them all out. This might help you save money and get the most out of your solar installation.

Final Thoughts

Finally, study your electric bill monthly and compare prices frequently to verify you’re getting the greatest offer.

Make the most of solar discounts and incentives.
You must decide whether to purchase or lease your solar panels. Although purchasing solar panels would normally save you more money in the long term, leasing can be a decent choice if you don’t have the upfront cash to purchase panels altogether.

Consider the size of your solar array. A larger array will produce more electricity and save you money on your utility bill, but it will also be more expensive to build.


Tim Carter
Tim Carter

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