Many people pay their electric bill without thinking twice, let alone understanding what they are getting charged for and why. Most just look at the amount owed, make the payment, and then wait for next month’s bill to arrive.
This is understandable, as most people don’t know the components of an electric bill. That is why we created this blog. We’ll take a look at the common components of an electric bill with and without a solar system. After reading it, you won’t be able to look at your electric bill the same way again, and that’s a good thing.
Understanding Your Electric Bill
For this example, we are using a bill from PPL Utility, a Central Pennsylvania utility company. The colors and layout might be slightly different from other utility companies, but the information they provide is pretty much the same.
So, here’s a breakdown of the sections on your electric bill that you should pay attention to when paying your next bill.
Your Electric Usage Profile
In the Electric Usage Profile section, you will be able to see your monthly usage for the current billing cycle, how your energy consumption compares year-to-year, and what you used the month prior to this billing cycle.
This information is helpful because it allows you to spot trends. You might be able to identify something you’re doing differently in the current year versus the prior year that is increasing the kilowatt hours (kWh) you’re using. Maybe you set your heat a few degrees higher this year, and now seeing how much more energy you used may make you think twice the next time you go to turn up the heat.
Solar Tip: We use these charts to determine the size of a solar system you will need for your home. We will build the system to produce 100% of your energy consumption or as much as feasible with the space you have available.
The next important section is your billing summary. This is where you’ll see the amount of money that you owe, and it’s broken down by Total Distribution Charges and Total Generation & Transmission Charges.
Just looking at this section will likely raise a few questions, like “What are Distribution Charges” and “What are Generation & Transmission Charges”. Per PPL, Distribution Charges are a monthly charge to recover the cost of local equipment used to take electricity from high-voltage transmission lines to a voltage that can be used in your home. The Generation Charge is the monthly cost for the production or purchase of electricity. A Transmission Charge is the cost to move electricity over high-voltage transmission lines from the generation facilities to your local utility’s distribution lines.
If you are looking for a more detailed breakdown of your charges, you’re in luck. The Billing Details section is where you will want to go next.
On the backside of your bill, you will find a detailed breakdown of how your charges were calculated. This section provides the details for each of the line items listed in your Billing Summary.
How to Shop For Electricity
In Pennsylvania, you can choose the electric supplier that you would like to purchase electricity from. This section gives you the information needed to make a change, including your account info, rate schedule, your current rate per kWh, and the website you need to visit to make a change.
If shopping for a cheaper electric rate doesn’t reduce your bill enough, consider investing in a solar system. Learn the basics with our Solar Guide.
Understanding Your Electric Bill After Installing Solar
The main difference with your electric bill after you install solar panels (aside from the much lower bill you will owe) will be three new sections: kWh Use By Meter, kWh Received (from Customer), and the Net Metering Summary. These new sections will show you what you're using at your property versus what you're pulling from the grid.
When looking at these sections, it’s important to remember how solar energy works. The energy generated from your solar system will be used at your property first, and then any extra production above what you use will pass through your meter back to the grid, making your meter spin backward. This is important to remember for two reasons: 1. the production on your PV monitoring system will be different than the production listed on your electric bill, and 2. the usage charts on your electric bill will only show the energy that passes through your electric meter. This is a common point of confusion for new solar system owners.
The kWh Use By Meter - kWh Delivered (to Customer)
This section will show how many kilowatt hours you’ve pulled from the grid (remember, this is the amount after you used all the energy produced by your solar system). In this example, our customer used 770 kWh from the grid during this billing cycle.
kWh Received (from Customer)
This section shows the total number of kWh that was passed back to the grid (this is the production from your solar system that’s not used at your property and is passed back to the utility grid). In states that allow Net Metering, a one-to-one kWh exchange will take place. The customer in this example had an overproduction amount of 704 kWh that was sent back to the grid during this billing period.
Now that you have the information from the kWh received and kWh used sections, determining the number of billable kilowatt hours is simple. Take the kWh used number (770) minus the kWh received (704). This customer used 66 kWh more than what he sent back to the grid (Delivered - Received), and that’s what he will be charged for during this billing period.
Net Metering kWh Summary
In addition, your electric bill should include a Net Metering bank summary. This section will show how many kWh you rolled over from the previous billing cycle, how many kWh you added to the bank during the current billing cycle, and the new balance after this billing cycle. The kWh in your bank will be carried forward each month and then sold back to the utility company at the end of the year.
If your a solar system owner and your kWh Use by Meter seems high because of a non-weather-related dip in solar energy production and you haven’t made any changes that would impact your energy consumption, your system could be in need of some maintenance. Learn how Paradise Energy’s Maintenance Team can help keep your system performing at its peak.