Understanding savings: How to read solar electric bills
If you’re considering solar at home, it’s critical that you understand your electric bills if you want to reduce your long-term energy expenses. With a clear picture of your home’s electricity consumption and costs, you can optimize your system design to lower energy bills after going solar, with lifetime savings over 25 years or more.
In this article, we outline how to read solar electric bills and walk through what you can do to maximize your savings on your home’s ongoing energy costs.
Before going solar: How to read your electricity bill
As solar systems can help lower your spending on utility energy, understanding the details of your electric bill is vital for you to make an informed decision with your home. To begin, kilowatt-hours (kWh) are the units of electricity that measure your home power consumption and solar energy production. On a basic level, an optimal solar energy system will produce the same number of kilowatt-hours that a property consumes each year.
As you read your electric bill, you’ll notice there are some expenses that may not be eliminated after going solar—such as utility overhead or grid connection fees. To determine how many solar panels you’ll need, you can check monthly energy usage on your bills and consider how your home’s electricity demand may change in the future.
In some areas of the United States, consumption on utility bills is broken down into different pricing categories, which are based on local energy demand or the time of day that the electricity was consumed. In this case, electricity may be more expensive during peak hours—typically in the afternoon and early evening—than during off-peak or partial-peak periods.
Energy bills can also be broken down into separate sections for electricity production and distribution or transmission. These charges may be made out to the same company or separate providers, depending on your utility, and each contributes to your total electricity bill expenses.
Once you get to know your electric bills and understand your home’s energy needs, you can then contact a professional or use a solar energy calculator to design and install the optimal photovoltaic (PV) system for your property.
After going solar: Understanding your electricity bill
After you’ve installed a home solar energy system, your electric bill will look much different than before, with specific details that depend on where you live. Most importantly, your solar electric bills display the amount of electricity exported by your PV energy system alongside the quantity of grid-supplied power your home imports. For your bill total, you only pay the difference.
How net metering and solar energy billing policies affect electric bills
Your utility provider determines the value of the electricity your solar energy system produces and shares with the grid. In over 30 states, utilities are required to offer net metering, which compensates solar producers for shared electricity at retail or near-retail rates.
At the end of your annual billing cycle, you’ll receive a “true-up statement” for any excess net metering credits your property has accrued over the year. True-up payments are usually made on the anniversary of your installation date, or the month it was installed, though this varies by region.
While net energy metering (NEM) policies have evolved across the U.S., several states have adopted net billing tariffs (NBTs). Nicknamed NEM 3.0 in California, the value of solar electricity exported to the grid under a net billing policy is much lower than when compared to traditional net metering by as much as 75% less. Instead of compensating solar producers for electricity exports at retail rates, net billing export values are based on utility costs avoided.
Example: Electricity bill after solar for a California resident who installed a system in 2025 After the installation, the excess power your system sends to the grid will earn net billing credits. These will offset energy costs incurred when your panels aren’t actively producing electricity, like overnight. In this example, if your home consumes 850 kWh and your solar energy system produces 900 kWh over the course of one month, you may be credited for the excess 50 kWh of electricity at your utility’s net billing rate. Some homeowners, like Southern California Edison customers, can also elect for an Annual Billing Option (ABO), in which net energy charges are paid annually rather than monthly. |
As a result, battery storage has become an increasingly viable way to maximize your savings on electricity bills after going solar. If you live in an area with NBTs, a battery is vital to store the excess electricity your system produces throughout the day so that you can avoid costly grid energy later during peak billing hours.
How to maximize savings on solar energy bills
While solar can reduce your electricity bills, lowering your home’s energy consumption can also help maximize savings with smart usage habits and home efficiency improvements. It’s important to remember that your savings on electricity bills are still related to the amount of energy you consume at home, even after your panels are installed.
After going solar, it’s critical to maintain smart energy conservation habits to maximize your savings, including the following:
Utilize smart battery storage solutions.
Solar storage can reduce your reliance on grid energy by allowing you to shift your home's energy use during peak-demand periods or power high-consumption devices solely with the electricity you produce on-site. You can also automate some of these processes with integrated smart home devices to maximize savings with minimal effort required.
Monitor and maintain your PV system.
While solar energy systems are relatively low maintenance, regular solar panel cleaning can ensure your system captures as much sunlight as possible for maximum electricity bill savings. We also recommend occasional professional system inspection as equipment or workmanship warranty periods approach their end, to ensure everything’s operating as safely and efficiently as possible.
Improve your home’s energy efficiency.
In 2024, there are many home energy rebates available across the U.S. This includes federal incentives worth up to $14,000 per household for ENERGY STAR-certified electric heat pumps (like air heating, cooling, or hot water), clothes dryers, and kitchen appliances, as well as electrical panel upgrades, wiring, insulation, air sealing, and mechanical ventilation products.
Next steps
Understanding your electric bill is a vital step in your long-term electricity expenses, whether you’re considering going solar or have already started your solar journey. By working with a solar professional, you can design a system that maximizes your savings based on your home’s energy bills, local net metering policies, and the available installation space on your property.
Solar electric bill FAQs
How do I read my solar electric bill?
Your solar electric bill can usually be accessed online through your utility provider. Solar electricity bills include credits for the power your system produces as well as debits for the grid-supplied energy your property consumes, which results in total monthly costs based on net usage.
Why is my electricity bill high even after installing solar panels?
High electricity bills after installing solar panels can happen for several reasons, including increased energy usage, inadequate system size, malfunctioning equipment, steep local utility rates after sunset, grid connection fees, or low power generation from shading or dirty panels. While there are some expenses that cannot be eliminated by solar, regular maintenance and monitoring can help fix these problems and ensure your system delivers maximum ongoing savings.
What is net metering?
Net metering is a solar energy billing policy that allows you to earn utility bill credits for the electricity your system generates and sends to the grid. As your solar panels produce excess power throughout the day, your net metering credits can alleviate expenses from the grid electricity you consume outside of solar-producing hours, resulting in decades of utility bill savings.
How can I check my daily energy usage?
After going solar, you can monitor your daily energy use through the Enphase App or your utility's online portal. These tools can give you detailed insights into your consumption patterns and help you find ways to further save energy and cut costs.
What are time-of-use rates?
Time-of-use rates are a demand response utility billing method with variable electricity prices based on the time of day the energy is consumed or produced. If you prioritize self-consumption and only use grid electricity during off-peak hours when rates are lower, you can minimize your total ongoing energy costs at home with solar. With a home solar battery, you can achieve the most time-of-use savings possible and sometimes even automate your home’s energy consumption for minimal ongoing costs.
