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How utility export rates work

May 19, 2021 | 2min read

If you are planning to go solar and your utility doesn’t offer net metering, you may be wondering how export rates work. When you use energy from the grid, you are charged the retail rate. When you send excess power back to the grid, you are only paid a fraction of the retail rate. That’s the export rate. To maximize your solar savings, it is important to understand how export rates work and how to match your solar generation to your electricity needs. 

What are export rates?

Utility export rates are the alternative to net metering. These rates determine the payment you receive for the excess energy you supply to the grid. Rates vary by utility but are typically less than the retail rate you pay for electricity. In most cases, it costs the homeowner more to generate this energy than what they get paid for from the utility. This is why it may be wise to undersize your solar system to avoid sending energy back to the grid. 

Tips if you are on an export rate plan

Utility export rates are not as beneficial for residential solar owners as net metering programs. It often does not benefit customers financially to export large amounts of solar electricity to the grid. In fact, they could actually lose money in the process. That’s why it is important to use all the energy your system produces and send as little as possible back to the grid. To maximize your solar savings, our solar experts may recommend a smaller system that generates only 60% of your average electricity use. Every kilowatt-hour that you produce and use is one less kilowatt-hour that you need to purchase from your utility, which will reduce your utility bill. 

How batteries can help with export rate plans

If you would like to aim to produce 100% of your home electricity usage, consider installing home batteries. They will store excess energy instead of sending it back to the grid. You can then use your stored excess energy at night or in the event of a power outage. If you provide 100% of your own power, your utility may only bill you non-bypassable charges and local taxes. 

Going solar with Freedom Forever 

Freedom Forever is here to help you with your solar journey. Our independent authorized solar experts can answer your questions about local utility export rates and recommend the right size system for your needs. Freedom Forever also installs batteries and can stack them to provide as much energy storage as you want. Keep in mind that even if you opt for a smaller system to provide  60% of your electricity, you can add solar panels in the future as rates and incentives improve.

Ready to go solar? Call us at 800-685-1850 or click below to get started