One of the main reasons people go solar is to lower their electric bills. The thought is: If your solar panels generate more electricity than your home uses, you wouldn't need any electricity from the utility grid—and that would mean you wouldn't have an electric bill! Right?
Unfortunately, that's not how electricity bills work, especially when you consider your daily energy usage habits and required fees from the utility company. This post will explain why you will still have an electric bill after installing solar panels, but also how solar energy can still help you save on your overall energy costs.
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4 Common Reasons Why You’ll Still Have Electric Bill with Solar Panels
Let’s get this out of the way first: Unless your home is totally off the grid (an extremely rare and expensive scenario) you will still receive an electricity bill every single month.
It’s a very common misunderstanding that you will no longer have an electric bill if you install solar panels on your home. Even with solar, there are four main reasons why you’ll still get a bill:
1. Cloudy Days & Nights
The main reason is simple: Your solar panels need the sun to generate electricity.
Not only is it not sunny every day of the year, but the sun goes down every single night. In other words, unless you plan to never use electricity at night or on stormy days, your home will still need to use electricity from the utility grid. Thus, the average homeowner will still get an electricity bill each month, even if their solar panels produce electricity at maximum efficiency.
Going solar while still being connected to the grid means getting the best of both worlds: solar when it's available, and additional energy when you need it.
2. Utility Service Charges
Since most people still want to use electricity in their homes, even if their solar panels aren’t producing it, the vast majority of residential solar panel systems are connected to the utility grid. Known as being “grid-tied,” this means your home can draw electricity from the grid when its solar panels don’t produce enough electricity.
Being connected to the utility grid means you will receive a bill from that utility, even if you literally only used electricity generated by your solar array. Your bill includes various utility service charges on top of electricity prices, and some are charged regardless of how much electricity you use.
The actual fees and amounts depend on your local utility company, but can include:
- Customer Service Charge: Covers costs related to meter reading, account maintenance, billing, customer service, and general utility operations.
- Distribution Charge: A charge for building and maintaining the electricity distribution system, including transformer stations, and overhead and underground power lines.
- Transmission Charge: Covers the cost of high voltage transmitters used to carry electricity from the generating station to your home.
3. Lack of Solar Battery Storage
When you have a solar energy system on your home, there can be times when you will generate more electricity than your home needs, especially during peak sun hours. If you have solar battery storage installed, you could save that excess energy production and use it when the sun goes down.
However, even if you have battery storage, you’ll still typically want to stay connected to the grid. Having enough battery storage available to power your home for extended periods of time can be expensive. It’s usually better to have some battery power ready for typical use, with the grid still available as a backup in case you need even more power.
If you don’t have a solar battery storage system installed, you won’t be able to use that extra energy at night, which means you’ll have to draw it from the utility grid. And that means you’ll get charged for that usage.
4. Lack of Net Metering
Net metering is a utility billing program that allows you to get credit for your excess solar generation. Whenever your solar panels generate more electricity than your home needs, that excess energy is sent to the utility grid. Your utility company or electricity provider then credits your account for that amount of electricity.
The value of this credit varies and depends on your utility company, the net metering terms it has set, and your electric rate. However, the idea is that you can use those credits to offset the cost of electricity you pull from the grid in the future.
If your utility company doesn’t have a net metering program, you won’t be able to earn any credit for your extra electricity. Thus, when you draw from the utility grid at night or during stormy days, you will have to pay for that usage, instead of having the credits cover it.
Average Monthly Electric Bill with Solar Panels
Yes, you will still have an electric bill after installing solar panels. But how big (or small) will that amount be? The size of your monthly electric bill with solar panels can depend on several factors:
Utility Company Fees
Your utility company will still send you a bill containing electricity charges that cover customer service and delivery fees. Some will be flat monthly charges, while others take into consideration your total electricity usage. Before going solar, remember to ask your utility company which charges you will continue getting billed for, even after installing solar.
Solar Offset
Solar offset is the measurement of how much electricity your solar panels produce vs. the amount of electricity your home uses. Many systems are designed by the solar company with a solar offset of “100%” - the amount you use and the amount your panels make are equal when measured over an extended period of time.
Typically, the higher the percentage of energy that you consume from solar power, the lower your monthly electric bill will be.
Local Weather Conditions and Seasonality
The amount of energy your solar system produces depends on the weather condition in your area, also known as solar seasonality. For instance, if your location often gets a lot of cloudy days, your solar panel system might not generate enough electricity to meet your home’s typical energy consumption needs. As a result, you are likely to rely more on the electricity grid than someone living in a sunnier climate.
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Amount of Power Your Home Uses
The number and types of devices and appliances in your home will impact how much power you use. If your solar system doesn't produce enough power to run these devices, you will rely more on the utility grid, affecting the cost of the electric bill you get each month.
Your System Not Working As It Should
While this is a rare occasion, your solar system might not be generating electricity with maximum efficiency. To avoid issues, you can:
- Check your solar monitoring app to see how much energy your solar system is producing, and compare it to historical averages.
- Contact your solar panel company to troubleshoot your solar system and get everything running properly again.
In addition, your power consumption and usage habits might have changed over time, making it so your solar system is unable to meet your increased energy needs.
How To Lower Your Electric Bill with Solar Panels
Ultimately, the relationship between your solar panels and the size of your electricity bill will depend on how much electricity you use and how much you generate. While you can’t control how much electricity your solar panels generate, you can take a few measures to lower your electric bill with solar panels:
Reduce Your Energy Usage
Using less electricity plays a major role in lowering your electricity bill. Some of the most effective ways to conserve energy usage in your home include:
- Use a programmable thermostat to ensure your heating and air conditioning system is only on when you need it.
- Use LEDs instead of incandescent light bulbs.
- Carry out a home energy audit to assess your energy usage, improve your energy efficiency, and cut down on costs.
- Always turn off appliances and devices when not in use.
Install Solar Battery Storage
If your solar panels often generate more power than your home uses, you could invest in solar battery storage to capture that excess electricity. Solar batteries can maximize the potential of your solar panels, ensuring you can benefit from your excess generation when there's no sunlight. The batteries store excess generation throughout the day, so you can use the electricity at night or during cloudy days instead of drawing power from the utility grid.
Enroll in Net Metering
Net metering allows you to send your excess power to the utility grid in exchange for credits on future electric bills. You can then apply that credit to the electricity you draw from the utility grid at night or during bad weather.
Yes, You Will Have an Electricity Bill with Solar Panels
In theory, you could eliminate the “electricity” portion of your electric bill if:
- Your solar panels operate at maximum efficiency.
- Your home uses less electricity in the daytime than your solar panels generate.
- Any excess generation is stored in solar batteries and/or sent back to the utility grid with net metering.
- Your home uses less electricity at night and on cloudy days than you have in your batteries, or you have net metering credit to cover that use.
However, even in a perfect solar offset situation, you will still have an electricity bill after installing solar panels because of mandatory utility company fees. You can never fully guarantee that you will achieve that perfect offset every single billing cycle, so in almost all cases, it makes sense to stay connected to the electric grid. That means you will still have to pay the required fees every month, as set by your utility provider.
Luckily, by lowering your energy usage, investing in battery storage, and enrolling in net metering, you could pay a much smaller energy bill with solar panels than without them.
If you're ready to install solar panels to help offset energy costs and lower your electricity bill with renewable energy, you can get started today with our Free Design and Solar Savings Estimate tool to see how much you might save by going solar.
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Cory O'BrienSenior Director - Growth MarketingCory brings over 8 years of solar expertise to Palmetto, and enjoys sharing that knowledge with others looking to improve their carbon footprint. A dog lover residing in Asheville, NC with his wife, Cory graduated from UCSB. If you run into him, ask him about the company he founded to rate and review beer!
