In certain circumstances, an electric company pays for solar energy if their customer uses less energy than they generate from their solar system. Electric companies determine how much power a customer has used over the course of a year. If the customer has used less electricity than their solar system produced, then the customer may receive a bill credit at the end of the year. However, there may be other factors, such as Time-of-Use billing, that can affect how the electric company bills for power usage.
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Net Energy Metering (NEM) How the utility company pays for power produced
Net Energy Metering is the practice of crediting a utility bill for the energy that a solar system produces. The amount credited depends on the type of billing. For flat-rate billing, a flat-rate compensation may be issued for that power. The rate of compensation will vary by the utility company a customer is served by.
Time-of-Use rates
For Time-of-Use (TOU) rates, the amount of compensation a customer may receive will depend on the time of day power usage from the grid was made as well as how much power was used. In California, peak TOU rates for all three major utilities are from 4 PM to 9 PM. Those are the hours the utilities charge the highest rates. During the day, when a system is actually generating power, the electric company pays and charges much lower off-peak rates. To minimize how much is charged for electricity, it’s best to minimize power usage during peak rates. Another solution, especially in California, is to install home batteries. The batteries can power a house during peak rate hours and even provide power during blackouts.
The true-up bill
If your utility offers net energy metering, the company calculates how much is being paid (or how much is owed) for energy at the end of the year. That year-end bill is called a “true-up” bill. Many homeowners use more power than their systems produce so they get a bill at the end of the year. To avoid getting a bill at the end of the year, you should be careful to avoid using more power after you go solar than you did before you went solar.
Freedom Forever can help you get the most out of home solar
As you can see there are several complicating factors that determine if the electric company pays its customer for power or you pay them. Freedom Forever can help you get the most out of solar by designing and building a system that fulfills your power needs and produces the most energy you are allowed to produce. We also have home batteries that can help you avoid peak rates. Plus, thanks to our 25-year production guarantee, you’ll have peace of mind that your solar system is always working as efficiently as it was designed to.