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

Occasionally, we receive a call from someone who has solar put on their home but is dissatisfied. This typically occurs when people receive their “true-up” bill at the end of the year and are astonished to discover that they owe more more than they anticipated! This frequently causes people to feel that the system is just not working, and they now want a third-party to come out and examine the system’s performance.

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

Your system is just not functioning properly!

Although this is frequently cited as the primary reason for the high charge, it is not always the case. The majority of systems have been installed correctly and are operational. However, every now and again, we run into a system that is completely dysfunctional. That was the case for one man who was certain his system had never worked and that the firm that installed it was intended to defraud him. We saw no evidence of this—the system had been installed and the overall craftsmanship appeared to be good, so it wasn’t as if someone simply slapped the panels on the roof and fled. However, given that this was an Enphase system, there should have been monitoring in place to ascertain the system’s performance. Except that the installer had neglected to complete the monitoring system’s configuration!

When we emerged, we were able to get direct access to the Envoy, and while it could see the microinverters, it was evident that they had not generated any power in over a year!

Therefore, how can the owner of a solar system avoid this? Simple—when your system is activated, ensure that the installer talks you through the system’s functioning so that you can verify with your own two eyes that the system is producing energy. (This might be a reading from the inverter/monitoring system, a spinning performance meter, or a signal that the utility meter is reversing direction.) Better better, ask them upfront how you will know your system is functioning, and then have them prove it to you when it goes live!

Your system is operational, however…

This second scenario is significantly more likely: the system is operating well, but it is falling short of your savings goals. There are two primary causes for this, in our opinion: hype and overuse.

Be cautious of hype

One cause for this gap is that a dishonest salesperson exaggerated the savings that might be realized by installing the system. For example, we have seen “savings” forecasts based just on the system’s size, without respect for the system’s shading or orientation – to say nothing of the utility’s real rate structure.

Systems that are shaded consume less energy. Systems oriented away from the equator will generate less energy. A utility consumer paying on a time-of-use basis may well save less than a client paying on a tiered basis (depending on how those rates are designed).

The idea is to be suspicious of oversimplified savings predictions. A thorough study will take into account all of these factors in order to produce the most accurate estimate of savings.

Solar is not a silver bullet

Even the most optimistic savings prediction is contingent upon future energy use being consistent with the past data provided by the solar business (unless increases are specifically discussed and included). While many people who own solar energy systems become more conscientious about decreasing their overall energy use, others take the exact opposite approach. Indeed, it is fairly unusual for people to state that one of the reasons they want to “go solar” is to afford to use their air conditioning “more” during the summer.

Solar energy systems are finite resources—they can only generate a certain amount of energy proportional to their size, and most utilities limit system size to the site’s historical energy use average. If you install solar but then treble your annual energy use, don’t be shocked if you don’t save any money!

What we have here is a communication breakdown!

Which brings us to the most likely culprit—a breakdown in communication between the installer and the user. This is due to Net Metering and the intricacies of the majority of energy bills. (A large portion of the fault for this lies with the utilities, which are hell-bent on making their bills as difficult as possible!) Let us begin by summarizing the issue and then illustrating it with a concrete case.

How Net Metering Works

Solar system owners – at least in Southern California – are governed by utility regulations known as Net Energy Metering, or simply Net Metering. This works as follows: the day your solar energy system receives “Permission to Operate” (or PTO) from the utility, your bills will move to Net Metering (often the utility will change your meter to allow for that switch). Each day, your system will either export (sell) energy to the grid or import (purchase) energy from the grid.

Consider the following scenario: you wake up at 6 a.m. and it is still dark outside. You switch on some lights, the radio, and the coffee machine, among other things. Because your solar system is not producing any electricity (remember how dark it is outside?) you are purchasing energy from the grid. You leave for work as the sun rises and your system activates. Your solar system generates electricity during the day, but no one is using it—the A/C is turned off, the TV is turned off, and the home is dark—so all of that surplus energy is sold back to the utility. Your swanky new meter maintains tabs on all of that energy’s inflow and outflow.

Each billing cycle, the utility will examine those readings—how much energy was sold vs how much was purchased—and “net” off the difference. You will receive a credit if you were a net seller of energy. If you were a net energy purchaser, you will owe money. However, here is where some people become confused—your statement will not include a charge for the energy you consumed that month. Typically, you will be charged just for any “customer charges” that may apply, as well as taxes and other costs. The charge for your energy use (or credit, if you are that fortunate) is carried forward to the following billing cycle, and the next, and the next, until the anniversary of your PTO date. Now that your use has been “corrected,” you will either receive a bill to pay (if you were a net energy purchaser for the year) or a check (if you were a net energy supplier, but don’t get too excited because the amount is rather little).

The trouble is, depending on your level of net energy use, that bill might be rather substantial, in some cases much over a thousand dollars or more!

Of course, you would have received bills each cycle indicating what you were accruing (either a balance due or a credit), but because no payment is required, it is easy for some to overlook those bills, and if this process has never been explained—or even if it has been explained but the consumer simply did not “get it” at the time—this can result in a nasty surprise.

The bottom issue is that solar businesses must do a better job explaining how this works. (Therefore, this post!)

A case in point

Consider the case of a hypothetical solar system owner, whom we’ll name Bob. Now, Bob is an intelligent man, but this is his first solar energy system. When the system went online, his installer explained everything to him, but Bob was sidetracked by the prospect of a possible zero-bill. Because his system includes Enphase microinverters, he receives monthly energy production emails from Enphase, which looked interesting, but he never bothered to reconcile his Enphase report with his utility bill (Bob isn’t big on checkbook balances, either). To be fair to Bob, he receives an Enphase report for each calendar month, but his billing occurs every two months and is not based on calendar months; rather, it is based on meter read dates (e.g., 7/28/2016 to 9/26/2016).

The good news is that Enphase has a reporting option that enables you to input any two dates since the system went live and obtain daily energy output totals. Let’s examine what we can glean by comparing Bob’s billing data to his production statistics obtained via the Enphase reporting feature:

The first two columns indicate when each meter reading/billing cycle begins and ends. The purchased column represents the quantity of energy Bob obtained from his utility. The sold column indicates how much energy Bob returned to his utility during that time period, as recorded by the utility. According to the Enphase website, the following column represents the quantity of energy generated by Bob’s system during the dates in the billing cycle. However, how is this possible? The utility claims Bob sold 774 kWh of energy during that initial period, while Enphase claims his system produced over double that amount, 1,338 kWh!

How are we to reconcile this discrepancy? The answer is straightforward: consume locally. It’s critical to keep in mind that the utility has no notion how much energy Bob’s system generates; all they see is the amount of energy Bob sells back to them. Thus, both Enphase and the utility are right; they simply measure different quantities. Enphase quantifies the entire amount of energy generated. The utility measures energy sold to them; the difference is energy utilized to power Bob’s house that did not originate with the utility but rather with the solar system! Bob’s system generated 1,338 kWh in the first billing cycle, of which 774 kWh were sold back to the utility, leaving 564 kWh to power his residence. That implies Bob’s total consumption for the month is equal to the 1,402 kWh he purchased from his utility plus the 564 kWh of solar energy utilized locally, for a total of 1,966 kWh. Applying that logic to the remaining data reveals that Bob’s overall consumption has climbed in all billing cycles except one, with a whopping spike around the holidays! (Perhaps there are too many holiday lights?)

The production data indicates that Bob’s system has been operating as expected – growing throughout the summer and reducing during the winter. Here’s a graph to put it all into context:

The blue shows the energy produced on a daily basis. The gray line represents the projected system output (in this case modeled using the CSI calculator). Throughout the system’s lifespan, the greatest quantity of energy generated in a day was 29.7 kWh (42 percent more than expected), and on the day this graph was made, the system produced 15.7 kWh.

Generally, performance exceeds expectations (particularly in the late June through early November period). However, by mid-November, conditions deteriorate—not due to a flaw in the system, but due to unusually rainy weather in Southern California (as we prepare for a 1′′/hour rain storm today!). For the most of the last two months, actual output has fallen considerably short of forecasts, with just 77% of forecasts realized thus far this month. Despite this, the system has generated 99 percent of its expected lifetime output.

This highlights a couple of critical factors for me: To begin, you have to adore the data made accessible by the Enphase monitoring system. It enables system owners and installers to monitor system performance in near-real time, as well as to analyze historical data in order to identify trends and patterns. Priceless!

Second, we as solar specialists must do a much better job of informing our clients about the process so they are prepared. (I’m excluding the hype-sters, who couldn’t care less about the consumer’s knowledge as long as they make a sale.)

We deal with this daily, yet for the majority of our clients, this is all novel and bewildering. We must take the time to explain how this works in order for them to grasp the true worth of their investment.