One of the great things about going solar in the information age is all the detailed information you'll get on system performance.
But it’s important to realize that your utility company only gets the data they need to compile your bill.
In particular, they have no way of knowing how much solar energy your panels are generating.
But how can that be? Won’t they need to know my solar production to calculate the amount of credit I’m due?
Though it may seem counter-intuitive, the answer is “no.” To understand why, let’s take a look at an example.
A sample bill
Consider a billing cycle in which your solar panels produced 960 kWh of electricity, but you only used 800 kWh to power your home. Here's what the bill from western Pennsylvania utility PPL would look like.
This bill can be confusing because it mentions neither the amount of energy your system produced nor the amount you consumed.
But you’re going to know that your system produced 960 kWh of power that month. So, it’ll be natural to wonder why on earth you’re only getting credit for 160 kWh.
The reason is that—though your solar panels did indeed produce 960 kWh of energy—800 of them went into powering your home. That means that only the remaining surplus of 160 kWh got sent back into the grid. So, that’s the amount your utility company is crediting you for.
Who knows what
Your utility company doesn't need to know the total amount of power you used during the billing cycle. All they need to know is the amount they supplied so they can bill you for it. In fact, that's the only information about your energy consumption they even have any access to.
Likewise, your utility doesn't need to know the total amount of energy your solar system produced. They just need to know the surplus you sent back into the grid so they can credit you for it. And, that's the only info about your solar production they have access to.
Understanding your bill
The upshot of all this is pretty straightforward. The amount of energy your utility company credits you for isn't the same as the total amount your solar system produces. You're only credited for the solar energy you send back into the grid, which is the total amount your panels produced minus the solar energy that went into powering your home.
The key factor is that your solar panels are saving you money in two different ways.
First, by generating cost-free energy to power your home that you would have otherwise had to pay for.
Second, by generating additional energy that you get paid for.
In short, when calculating your monthly solar energy credit, always remember to subtract the amount of free solar energy that went into powering your home from the total amount your panels produced.