There has been much talk in advertising from the solar industry about eliminating the electric bill, but what does that really mean? The electric bill from a utility has generation and delivery charges (sometimes combined), and then it has various other charges, fees, and taxes. In most cases, people don’t really read their electric bill, because it is very confusing, and the amount they pay is mostly similar from month to month.
Not surprisingly, the monthly cost of electricity adds up throughout the year to a substantial amount. When someone has solar installed, however, the electricity generated is used in place of electricity purchased, or it is stored for future use in the form of a net metering bill credit. In either case the electricity costs are lowered or “eliminated.” Some utilities allow the generated bill credit to cover all line items on the bill, including taxes, fees, and other bypassable charges, but some don’t. Here in VT, regulators have ruled that new solar installations since 2016 are no longer eligible to apply generation credit to “bypassable” charges, making them now non-bypassable. This means it takes a little bit longer – maybe an extra year – for a solar installation to pay for itself, but it remains the only home improvement or business fixture that does actually pay itself. For a look at a sample electric bill from a local utility showing the bypassable charges and solar net metering credit accumulation, see below.