How Much Does The Electric Company Pay For Solar Power? Best info in 2023

Have you installed or are about to install solar panels in your home or office? So you are feeling good about your decision.

Along with that, you need to know how much does the electric company pay for solar power?

By using solar energy to get the electricity, you are moving towards environmentally friendly and renewable energy.

How Much Does The Electric Company Pay For Solar Power
How Much Does The Electric Company Pay For Solar Power

Solar panels are costly and effective and are officially good at installation. You are using them, so you are confident that you can save money on your energy costs after years.

You can sell this electrical energy generated by solar panels to your electric company to offset your bill or get your credit.

But if we tell you about a bonus here, you may not know you can benefit from a solar tax credit. In our article, we will also get information about Solar Tax Credit.

If you want to know information about how much the electric company pay for solar power, How to generate revenue by selling solar power, How to sell solar power in the utility company’s grid, How much will your average electric bill be after using solar panels as well as what is net meeting Solar system and get information about the solar tax credit

I have tried to answer your question through my research, and I request you to read and comment on this answer till the end.

How Much Does the Electric Company Pay for Solar Power?

Electric utility companies worldwide pay differently for electricity generated by solar panels in their area of residence or business place.

This article has learned how electric utility companies in the United States pay for electricity generated by solar power.

According to the U.S. Energy Information Administration, total solar energy consumption in the United States was about 1,246 trillion Btu (or about 1.2 quadrillions Btu) in 2020.

According to the report of the EAI’s international agency Statistics, the worldwide solar power generation in 2019 is as follows:

  • China–32%
  • The United States–15%
  • Japan–11%
  • India–7%
  • Germany–6%

A typical U.S. household consumes approximately 10,766 kilowatt-hours (kWh) of electricity annually.

Many electric companies can apply a credit to your monthly bill if you are generating more electricity than you use in your solar panels in your home or business space.

The monthly basis will affect how much the electric company pays for solar power.

For example, the current up-rate for November is $.03988 (.40 cents) per kilowatt. If you sell this electricity back to SDGE, they will credit you to your account at .40 cents a kilowatt.

Then if you sell your 100-kilowatt solar power to an electric utility company, you will be credited up to 40 dollars! in your next electric bill.

Of course, for a solar panel you do not use, getting a bigger one from your electric company every month is not easy.

That’s why your electric utility companies have different guidelines and things to note, the most important of which is where you live.

Other than that, it is said that net metering is already beneficial to you, which can be a bonus for you. Let’s see how this solar panel of yours will work for you using solar energy.

Net Metering Solar System

Net metering is also called net energy metering. And if you want to know how much the electric company pay for solar power, it is also very important to know the net metering.

Net energy metering is the practice of submitting a utility bill for the energy generated by a system in which the amount deposited depends on the type of billing.

Thus the rate of return of solar energy the customer provides to the utility company may vary according to the utility company.

So let us first get to know what a net meter is.

how much does the electric company pay for solar power
How much does the electric company pay for solar power

What Is a Net Meter?

The net meter (solar net meter) is an incentive given to the consumer for solar energy use and allows you to store the electrical energy generated by your solar panel in the electric grid.

Throughout the year, when your solar panel generates more electricity than you need, such extra energy is sent to the utility company’s grid in exchange for credits.

Then at night or at other times when your solar panel is under production, you get the electric energy from the grid of the utility company, and then the credit is used to offset the energy cost through your net metering electricity.

With your home’s solar energy system of the right size and fitted in the right place, you can generate enough electrical energy to match your home’s electrical energy use for the rest of the year.

You have to keep in mind that the electrical energy generated from your solar panels varies with the seasons throughout the year.

The net meter (solar meter)helps you take into account this difference by depositing the electrical energy generated by this solar panel in your home to later use the electrical energy from the grid line.


US-compatible items have electrical plugs. Due to power outlet and voltage differences, this item may require an adaptor or converter to use at your destination. Check compatibility before buying.

How Net Metering Works in a Solar Power System?

When some people are not at home to use electricity, their solar energy system usually hits peak electric energy production in the afternoon. There is negligible use of electricity.

In contrast, energy consumption in the home is usually higher in the morning and evening.

That’s why net metering helps you create an account for the ups and downs of your current power generation and consumption.

With solar electric net metering when your solar power system produces more electricity than you need, this excess power is supplied to your electric company’s grid. When this happens your net really runs in reverse.

When your solar power system is not producing enough electricity, you can draw the extra electrical energy you need from your electric grid while your net meter rotates directly.

This connection between your solar power system and the utility grid line assures you that you can use your extra power generation and you will meet your power shortage.

Benefits of Net Metering

There are many benefits to using net electricity metering in a solar energy system, such as…..

  • Electricity bills have been reduced.
  • Benefits to the environment.
  • Natural energy conserves energy resources.
  • Encourages consumers to move towards renewable energy.
  • No need to install an expensive battery storage system.
  • Take a little pressure from the electric grid.

Analysis of The Potential Drawbacks of Net Metering

Before deciding whether to participate in the program, householders should be aware of a number of potential disadvantages of net metering.

  • Limited Availability: Not all utilities and states allow net metering use. There can be restrictions on how many customers can participate, even in states where it’s required.
  • Additional Costs: Net metering consumers may be subject to additional fees or rates from some utilities. These costs may outweigh the savings that the homeowner would otherwise realize.
  • Credit Caps: Some jurisdictions limit the total number of net metering credits that may be obtained, which may reduce the amount of money a homeowner can save.
  • Time-of-use rates are incompatible with some utilities, meaning that the power price varies according to the time of day. These rates might not work with net metering, which would reduce the homeowner’s savings.
  • Not Always Appropriate for Every Homeowner: Net metering may not be appropriate for households with minimal energy demand or insufficient energy production to balance their needs.
  • Maintenance: To keep solar panels operating at their best, they must be cleaned and maintained regularly. The homeowner might only be able to produce enough energy to benefit from net metering if the system is adequately maintained.

Be sure to consider your energy requirements and preferences before selecting whether or not to participate in net metering.

Additionally, it’s crucial to inquire about the local net metering rules and whether it’s appropriate for your circumstances with your state’s public utility commission and your neighborhood utility provider.

Net Metering Solar System Price

Prices of net meters used in solar energy systems vary according to their capacity, capacity, and different companies.

Read Also: How much does solar energy cost the utility company?

Can You Sell Solar Energy Back to The Power Company?

In answering these questions I will tell you that you can really sell solar energy to your power company.

We are absolutely right that solar energy can be a great financial investment for you but it is not because of the money you earn, it is because of saving your money.

However, the company has policies and laws to guide you on how the utility company compensates you for the electrical energy generated in your solar energy system.

You may be wondering if you can sell the electricity generated by my solar power system to a utility company but it is not and how much does the electric company pay for solar power?

But the advantage is that this is an on-grid solar power system in which you benefit from your financial impact as this adds credit to your solar energy system and costs which You manage your credit utility company for your monthly electricity bills.

Selling Solar Power to Generate Income

If you have a solar power system in your home, you may be wondering how to sell solar energy.

If you are generating solar power by installing a solar plant on your home or business building, you can sell it to a utility company and generate your income.

But you can’t sell it directly to sell energy.

You can sell the extra energy generated after using this solar power system for your home and then sell power back to the grid.

In this way, you can earn income by indirectly selling the solar energy you make how much does the electric company pay for solar power?

While most people in California have enough resources to make solar viable, some coastal areas are dilapidated, assuming you have a good resource. Here are some key steps to develop everyone on your property.

The use of solar energy is booming in the United States and around the world.

Policymakers in California and elsewhere have acknowledged this marine change in the price of solar.

Now, many programs are available to landowners to sell solar energy to them in their utility.

Does the Electric Company Pay You For Solar Energy?

In some cases, an electric utility company pays for solar energy if its customer uses less energy than the electricity generated from its solar system.

Electric utility companies determine how much energy a customer has used in a year.

And understand that if a customer using solar energy uses less electricity in their home than their solar system, then this customer can get their electric bill credit at the end of the year.

how much does the electric company pay for solar power
How much does the electric company pay for solar power

How Much is the Average Electric Bill

When you have a solar power system in your home, you may be wondering how much the electric company pays for solar power and what your average household electricity bill is for it.

According to the latest figures released by the Energy Information Administration (EIA), people in the U.S. household typically consume about 10,766 kilowatt-hours of electricity each year.

So it can be said that the monthly average of the American people is 897 Kwh.

As well as people from the United States pay 12.57¢ per kWh. Thus the average American’s electric bill comes to $113 per month.

Thus net meters are used by utility companies for what they do base on their solar energy systems, based on America’s average electric bill.

How to Read Electric Bills With Solar?

Uses and controls the energy consumption of your home using pure and renewable energy.

Most such electric bills cover some standard components. With a home solar system, such components are usually in the center of the front from which the electric bill is generated. Some of these components are as follows…

  • Service fees
  • Taxes
  • Use of Electricity
  • Production of solar energy through solar panels

However, with the solar energy system above your home, your electricity bill includes how many kilowatt-hours of energy you have used from the grid.

That electricity bill does not include how much energy you have used from your solar panels.

In fact, your utility company bill doesn’t even look at how much solar energy you have used so if you only use the energy generated by your solar panel then the amount of electricity used on your electric bill will be 0.

You will more easily understand how much the electric company pays for solar power.

Electric Bill After Solar Panels

After installing the on-grid solar system you will get the idea that you will get an electricity bill or in response, I will say yes because anyone expects up to 90% of their electricity bill budget after installation.

If you need 5 kilowatts and you have installed a 5-kilowatt system you can expect up to 90% savings, but if you need 5 kilowatts and you have 2 kilowatts you can expect savings accordingly.

Solar Tax Credit

How Much Does The Electric Company Pay For Solar Power
How Much Does The Electric Company Pay For Solar Power

The investment tax credit is also commonly known as a federal solar tax credit.

This allows you to deduct 5% of the cost of installing a solar energy system from your federal tax if you have installed it.

This investment tax credit(ITC) applies to both residential and commercial solar power systems and has no cap on its value.

Generally, as long as you have this your solar energy power system you are eligible for this solar investment tax credit.

Even if you do not have a sufficient tax liability to claim full credit in one year, you can roll over the remaining credit in the following year as long as you have implemented the tax credit.


Overall, this article has detailed information about how much electric companies pay for solar power.

We get information about how the net metering system used in the solar system works and what are its advantages and the price of the net metering solar system.

To find out how much the electric company pays for solar power, we can sell solar energy to a power company, as well as generate income from selling solar power.

We also get information about how the electric company reads the electric bill with the solar system and also about the solar tax credit.

I hope the information I have given in this article will be very useful to you.

Have a nice day, Good Bye… 🙂

FAQ: How Much Does The Electric Company Pay For Solar Power

Q1. Can a house run on solar power alone?

Ans. The answer is yes if you can run your home entirely on solar power! Especially in the countries of the world where we get a lot of sunshine during the year, it is convenient and beneficial to have a residential as well as a commercial solar system.

You can reap the benefits of a fully solar power system, but it also has some potential drawbacks that are inadvertently linked to it.

The important thing about the electrical energy produced by solar energy is that it is completely free.

Solar energy is very efficient energy and is pollution-free but you should be kept in mind the possibility of bad weather so that there is no problem with your plan.

Q2. Why is my electric bill so high when I have solar panels?

Ans. In answer to this question, I can tell you that you may not know but your home can consume even more energy than you thought.

Do you have a central air conditioner, washing machine, or heat pump or do you use a dryer frequently? You will have in mind that you are using more of the above equipment if you have a solar panel.

If you are just doing this, your electricity bill will be higher even if you use solar energy in your home.

Q3. How long do solar panels take to pay for themselves?

Ans. Depending on the region you live in, your solar panel allows you to pay for your own in 8 to 16 years.

Your location will determine the key metrics when trying to evaluate the value of the solar panel you have installed.

Factors like these What solar energy incentives are available to you How much have you paid and are going to pay for energy and distribution and how much has been developed?

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