Going Solar with Your Utility: What You Need to Know (2024)

Last updated: December2024

Deciding whether or not you should install solar panels can feel overwhelming. Understanding your utility's requirements for solar installations, the programs they offer, and whether they’ll buy solar power from you can be a great starting point. 

This guide can help you determine if going solar with your utility is the right choice for you and how to start your solar journey.

How do solar panels work with the utility grid to power your home?

There are a lot of misconceptions about how solar panels and utilities work together. When you install home solar, it’s typically a grid-tied solar system, meaning the solar panels on your roof will work with your utility to power your home 24/7. You usually don’t go completely off-grid. 

Here’s how it works: Your solar panels generate energy when the sun is shining. That solar energy is used by your home first, running appliances like your fridge and lights. Sometimes, solar panels produce more energy than your home needs and it will flow back to the grid. 

Since solar panels don’t generate power at night, you’ll need to rely on your utility for electricity after sunset. 

Will you still have a utility bill after you go solar?

Don't let pushy solar salespeople fool you — you can still get an electricity bill after you install solar panels. While it may be much cheaper than what you were paying before, don't be surprised if there's still a balance on your account. 

Why will you still get bills when you go solar? There are a few reasons:

• Solar can't offset certain utility fees. Most electric companies charge mandatory customer fees that you need to pay even if you have solar panels.

• Your home uses more energy than your solar panels produce. Sometimes, you use more energy than expected, and you'll have to pay for it! For example, you might crank your AC during a heatwave, using more electricity than your solar panel system is designed to produce.

• Your utility's solar buyback plan doesn't provide full credit for solar energy. Some utility companies only offer partial credit for the solar power you send back to the grid, meaning they won't fully cover the cost of electricity you take from the utility. 

Solar panels can still make a sizeable dent in your electric bill. Even if you have to pay a few mandatory charges, you could still get your energy costs to $0. Wouldn't you rather pay a $15 monthly customer charge than a $200 bill?

How much can solar panels save on your electric bill?

Find out now

Questions to ask about your utility before you go solar

It’s hard to know where to begin when figuring out how to go solar with your utility and if it’s even worth it. We’ve broken down some of the top questions you need to consider before going solar wtih your utility: 

• Does your utility offer net metering or a solar buyback program?

• Are there incentives or rebates offered?

• What are the interconnection requirements like?

• What fees will you pay?

• Are there system size limits?

Does your utility offer net metering or a solar buyback program?

Figuring out how your utility bills its solar customers should be your top priority when considering solar. Solar buyback and net metering plans can make or break an investment in home solar, and there is often nuance between programs as the rules can vary between states and utilities. 

The best-case scenario for solar is full-retail net metering. Under net metering, any excess solar energy you produce fully covers the cost of electricity you take from the grid, maximizing your solar savings. But, full-retail net metering is becoming less common as utilities push back against solar. 

Your utility may say it has net metering, but it might not provide true net metering benefits. In these cases, you might only receive partial credits for excess solar energy you send to the grid. These programs might be labeled as net billing, solar buyback plans, or feed-in tariffs. 

Solar billing plans that credit anything less than the full retail rate of electricity provide lower solar savings than true net metering. However, they can still substantially reduce your electricity bill, depending on the actual value of the credit. 

Utilities tend to make their rules around net metering hard to understand and incredibly complex. To learn how much you can save on your electricity bill, consider calling your utility or speaking with a local solar installer who is familiar with the offerings in your area.

Learn more: Homeowner’s Guide to Net Metering and How It Works

Does your utility have solar incentives or rebates?

Many utility companies have solar incentives and rebate programs that make solar a more attractive investment. There are generally two kinds of utility solar incentives:

• Performance-based incentives: These incentives pay you extra money per kilowatt-hour (kWh) of solar energy you produce in addition to net metering benefits! 

• Upfront rebates: Utility solar rebates directly reduce the upfront cost of your solar installation. They can either be a flat amount or vary with the size of your system. 

If your utility has a rebate or incentive program, it’s definitely worth considering solar. These programs can be combined with the federal tax credit and other statewide incentives, potentially reducing the cost of going solar by over 40%!

You can typically find information about available incentives on the solar energy section of your utility's website, and your installer can help you with the application process. You can also use our solar calculator, which will pull all available incentives in your area and estimate how much money they’ll save you.

What are the solar interconnection requirements like?

Like any electrical work, a solar installation must be done as safely as possible. Utilities have interconnection requirements to ensure your solar system operates correctly without affecting the overall grid. The entire interconnection process typically takes three to five weeks to complete.

All utilities require an interconnection application and agreement, which includes your system's proposed design and property specifications. Your solar installer typically submits the application.

Once the utility approves the application, the solar company can complete the installation on your roof. After installation, you may need to wait for local inspections, depending on the requirements in your area. 

Following the completion of installation and local inspections,  you'll need to wait for the utility to grant permission to operate (PTO), which can take up to three weeks. The utility may send an inspector or need to install a new electric meter to track your solar energy production.

After all of that, you can start powering your home with solar! Interconnection requirements vary between utilities, so it's a good idea to familiarize yourself with the ones specific to your area. Don't worry—your solar installer does most of the paperwork associated with interconnection; it's mainly a waiting game for you.

Are there any fees associated with going solar?

Utility companies usually charge an interconnection fee when you go solar. Solar interconnection application fees can be up to a few hundred dollars. 

You may also have fees on your monthly bill that solar can't cover, such as customer charges or billing fees. 

Check your utility website for information about the types of fees and non-bypassable charges that exist when you switch to solar. 

Are there solar system size limits?

Most utility companies limit how much solar you can install, so don't expect to cover your entire roof in panels. Usually, you can only install enough solar panels to cover 100% and 125% of your annual electricity usage.

This is fine for most people, as there's no reason to install an oversized system since utilities usually compensate you for excess solar energy in bill credits, not with a check. 

It gets tricky if you're looking to upgrade your house in the future, like electrifying your home, buying an electric car, or getting a pool. Utilities might make exceptions for oversized systems, but if you're not planning to make those changes immediately, you might want to wait before installing solar.

Also, there may be size limits to qualify for net metering or utility incentives. These programs make going solar a better investment, so you want to be sure you are within the requirements.

Get the best utility bill savings possible by using SolarReviews

Homeowners who compare multiple solar quotes save an average of $12,000 on an installation. At SolarReviews, we make the process of getting free quotes seamless so you can start your solar journey with confidence.

Our pre-vetted installer partners are reliable, local solar professionals near you who have experience working with your utility before to help your neighbors enjoy solar savings. 

We also house thousands of actual customer reviews on our site so you can gauge what each company is actually like. SolarReviews helps you get the best price on a solar system without compromising quality or service.

By going solar with your utility company, you not only reduce your monthly electric bills but also contribute to a cleaner, greener future. It's a win-win for both your wallet and the environment. So, let SolarReviews help you get the best utility bill savings possible today!

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