Solar Billing: How Solar Panels Work With Your Electric Bill
- Sarah Lozanova
- 5 days ago
- 9 min read
If you’ve recently gone solar, you might be scratching your head when your first solar energy bill arrives. That’s completely normal. Figuring out how solar panels work with your electric bill can be confusing at first, especially with all the moving parts—like how your solar system connects to the grid, how energy use is tracked, and how utility credits or extra charges show up on your statement.
Learning how solar billing works is one of the best ways to take full advantage of your system. Whether your utility uses net metering, time-of-use rates, or a hybrid billing model, knowing the details can help you better predict your monthly costs and avoid any surprises.
At GreenLancer, we’ve been helping contractors and solar system owners understand their energy systems for over a decade. We’re here to simplify how solar power billing works and give you the confidence to read—and maximize—the value of your solar energy bill.
How Does Solar Billing Work? - The Basics
Solar billing reflects how your solar panels interact with your home’s energy use and the electric grid. When your solar system generates electricity during the day, that power is used first to run your home. This reduces the amount of electricity you need to pull from the utility grid.
If your system produces more power than you use, the extra energy flows back to the grid. Depending on your utility’s net metering policy, you may receive credits or compensation for that surplus electricity. This setup is central to understanding how solar panels work with your electric bill.
Smart meters play an important role by measuring both the electricity your home consumes and the power your solar system sends back to the grid. Utilities use this data to calculate your monthly solar energy bill.
Here’s a breakdown of how solar power billing works:
Your solar system powers your home when the sun is out
Any extra electricity goes to the grid
You may earn credits for excess energy, depending on your utility company
.
Net Metering and Solar Energy Billing
Net metering, also called net energy metering, plays a major role in how solar billing works. It allows you to earn credits for the excess electricity your solar panels produce and send back to the grid. These credits can help lower your solar energy bill by offsetting the cost of power you use from the utility.
Understanding how solar panels work with your electric bill depends largely on your local net metering rules. These policies vary by state and utility, which means the amount and timing of the credits you receive can differ. To make the most of your system, it’s important to learn how solar power billing works in your area and how your utility calculates those credits.
Net Metering & How Solar Panels Work With Your Electric Bill
Net metering is a billing arrangement that plays a key role in how solar power billing works. During the day, your solar system may generate more electricity than your home uses. That excess power is sent back to the grid, and your utility tracks how much energy you export.
Depending on your location, you’ll receive solar energy bill credits either in kilowatt-hours (kWh) or as a dollar amount. Some states—like California—offer full retail net metering, where you're credited at the same rate you pay for electricity. Others, like Nevada, offer lower credits based on the avoided cost of generation.
How Solar Panels Work With Your Electric Bill: Variations in Net Metering & Solar Billing Policies
Your solar energy bill is directly shaped by your utility’s approach to solar billing and net metering. These policies determine how you’re credited for excess electricity your solar panels send to the grid—and how much you save.
Knowing how solar panel billing varies by location and provider helps you better manage costs and get the most from your investment. Reviewing your utility’s net metering guidelines is a key step in understanding how solar panels work with your electric bill and how to spot opportunities to maximize your savings.
Full Retail-Rate Net Metering vs. Avoided-Cost Compensation
Under full retail-rate net metering, each kilowatt-hour (kWh) your system exports earns a one-to-one credit toward the energy you use from the grid. That’s ideal for savings, because every kWh produced offsets your future usage at the same rate.
Other utilities use avoided-cost compensation, where excess solar energy earns credits at a lower rate based on the utility’s wholesale cost of electricity. This difference can significantly impact your solar power billing and reduce how much your credits lower your bill.
Monthly vs. Annual Rollover of Credits
Your solar billing setup may include credit rollover, either monthly or annually. If your utility allows credits to carry over month-to-month, you can build a reserve for times when solar production dips. If credits expire annually, unused kWh may be lost—making it essential to track production and usage to fully understand your solar energy bill.
State and Utility Program Differences
Policies for how solar billing works aren’t uniform across the country. Some states and utilities offer generous solar billing programs with one-to-one kWh crediting, while others offer limited benefits with reduced-value credits. These differences shape your solar experience and influence how much you benefit financially over the life of your system.
Alternatives to Net Metering & Solar Billing Options
Not all utilities offer full net metering. If yours doesn’t, your solar energy bill may be calculated using alternative billing structures. Understanding how these work is key to optimizing your savings and knowing what to expect from your solar panel billing.
Feed-in Tariffs (FITs) vs. Net Metering
With a feed-in tariff, your utility pays a fixed rate for every kilowatt-hour (kWh) your solar system sends to the grid. Unlike solar billing with net metering, FITs don’t offset your future energy use. Instead, they provide predictable compensation—typically at a set rate determined by state regulators.
Distributed Generation Policies
Some states promote distributed generation, where residents generate solar power and export it to the grid. However, these programs may limit how much compensation you receive or the size of the system that qualifies. This impacts how your solar panels work with your electric bill and the overall return on your investment.
Time-of-Use (TOU) Rates & Solar Optimization
TOU rate structures charge different electricity prices based on the time of day. Peak hours, in late afternoon and evening, cost more, while off-peak hours, such as overnight and midday, are cheaper. How to read your solar electric bill under TOU means shifting high-energy tasks—like running appliances or charging an EV—to daylight hours when solar production is highest.
Buyback Programs & Compensation Variations
Some utilities offer solar buyback programs, where they purchase your excess energy—often at a lower rate than retail electricity. These compensation rates can fluctuate based on market prices or contract terms, which affects how much your solar energy bill offsets your actual energy costs.
Understanding Time-of-Use Rates and How Solar Panels Work With Your Electric Bill
TOU billing changes how you're charged and credited for electricity based on the time of day. Instead of a flat rate, electricity prices fluctuate depending on demand.
What Is TOU Billing?
TOU billing breaks the day into different pricing periods:
Peak Hours – The highest rates, usually in the late afternoon and evening when electricity demand is at its highest.
Off-Peak Hours – Lower-cost electricity, typically during midday and late at night.
Super Off-Peak Hours – The cheapest rates, often in the early morning when demand is lowest.
How TOU Plans Affect Solar Savings
Your solar bill and savings depend on when you use and export energy:
Exporting Solar Power at Peak Rates – If your system sends excess energy to the grid during peak hours, you'll earn higher credits.
Pulling from the Grid at High Rates – Using grid electricity during peak times can increase costs.
Battery Storage Optimization – Storing solar energy during the day and using it in the evening helps avoid high rates.
Common Fees and Charges on a Solar Energy Bill
Even with solar, your solar energy bill will likely include fixed costs that aren’t offset by your system’s production. Not all solar energy system owners will encounter every fee listed below; the charges you face largely depend on your utility provider's policies and regional regulations.Â
Here’s what to look for when reviewing solar billing:
Basic Service or Connection Fees – Most utilities charge a fixed monthly fee, typically ranging from $5 to $30, to maintain grid access, even if your solar system meets all your energy needs.
Minimum Monthly Charges – Some utilities require a baseline payment regardless of solar production, often between $10 and $25 per month, ensuring all customers contribute to grid maintenance.
Non-Bypassable Charges – These are mandatory fees for grid upkeep, energy efficiency programs, or public policy initiatives. They usually range from $0.01 to $0.04 per kilowatt-hour (kWh) of grid electricity used, and solar credits cannot offset them.
Grid Access Fees or Standby Charges – In some states, utilities impose additional charges on solar customers to cover grid infrastructure costs. These can vary from $5 to $50 per month, depending on system size and local policies.
How to Read Your Solar Energy Bill
Understanding your solar energy bill helps you track savings and avoid surprises. Here’s how to break it down:
Finding Net Metering Credits
Look for a section that shows solar billing credits for excess energy sent to the grid. Depending on your utility, credits may roll over monthly or annually. Some utilities provide one-to-one crediting, while others offer a lower avoided-cost rate for exported power.
Identifying TOU Pricing Impacts
If you’re on a time-of-use billing plan, your bill will show different rates for peak, off-peak, and super off-peak hours. Maximizing solar use during peak times and running appliances during off-peak hours can increase your savings.
Checking for Unexpected Charges
Some utilities include minimum monthly charges, non-bypassable fees, or grid access charges that aren’t offset by solar credits. Review these line items to understand how they affect your total bill.
Calculating Your True Solar Savings
Compare your pre-solar and post-solar bills by looking at total energy costs and net payments. Keep in mind that billing cycles and seasonal changes impact solar production—higher summer generation may offset winter deficits.
Strategies for Maximizing Savings with Solar Billing
Understanding how solar billing works can help you make smart choices about your energy use and take full advantage of solar incentives. Your strategy should align with your local net metering policies, time-of-use rates, and whether or not you have solar battery storage.
Shift Electricity Usage to Align with Solar Production
One of the most effective ways to lower your solar energy bill is by using electricity when your system is generating the most. If your utility offers full retail-rate net metering, you’ll earn credit for sending power to the grid at the same rate you pay. But if your utility pays a lower avoided-cost rate, it’s better to self-consume that power instead of exporting it.
Try these energy-shifting strategies:
Run energy-intensive appliances—like dishwashers, clothes dryers, or electric water heaters—during midday when solar production is highest.
Use timers or smart home automation tools to schedule appliance use during peak sunlight hours.
Avoid using heavy loads in the evening if you’re not storing excess solar power in a battery.
Optimizing Energy Storage for Solar Bill Savings
If you're on a TOU billing plan, a solar battery can help you avoid high electricity costs:
Store excess solar energy during the day and use it during peak evening hours when grid rates are highest.
Reduce grid dependence during times when utilities charge higher demand fees or non-bypassable charges.
Self-consumption through storage can be more cost-effective than exporting power if your utility offers lower compensation rates for solar exports.
Maintaining Your Solar System
Keeping an eye on your system’s performance ensures you’re getting the most out of your investment:
Use monitoring apps from your inverter manufacturer to track your system’s solar production in real time. If your solar monitoring system isn’t working properly, check out our guide to resolving solar monitoring issues.
If there is an unexpected decline in solar energy production that you can’t correct, contact a professional to inspect your system. GreenLancer connects you with experts for solar repairs to diagnose and fix issues, ensuring your system operates at peak efficiency.
Get in touch with us at (866) 403-0925Â or fill out the form below to get started.
When to Contact Your Utility or Solar Installer
Your solar energy bill should accurately reflect your system’s performance and billing policies. If something seems off, it’s important to reach out to the right party for clarification or corrections.
Net metering credits missing or incorrect – If you aren’t receiving the expected credit for excess solar energy sent to the grid, contact your utility provider to review your solar billing details.
Unexpected fees or charges – Some charges, like minimum monthly fees or TOU rate adjustments, are normal, but if you notice unexplained costs, ask your utility for an itemized breakdown.
Monitoring data doesn’t match your bill – If your solar monitoring app shows higher energy production than what your bill reflects, your solar installer can check for system issues, while your utility can verify meter accuracy.
Choosing a Professional Solar Repair Service
If your original solar installer has closed down, you may need to find a qualified technician for system repairs or monitoring issues. Choosing a professional with solar industry certifications, such as NABCEP (North American Board of Certified Energy Practitioners), ensures your system is serviced by a knowledgeable expert.
GreenLancer, a trusted name in the solar industry since 2013, connects homeowners with experienced professionals for solar repairs, system inspections, and troubleshooting nationwide. Whether you need help diagnosing solar panel monitoring issues or ensuring your system is performing efficiently, GreenLancer makes it easy to find the right experts for the job.