Receiving a higher than expected electricity bill is always a shock, especially when you have a solar panel system installed on your house.
How can you be paying so much when solar power is completely free?
It doesn’t make sense, something must be wrong.
Well, you might be right, there could be a problem with your equipment.
Although this is not always the case, there are several reasons why your electric bill is so high with solar panels. In this article, you’ll learn the causes of these electricity costs and what you can do to fix them.
9 Reason Why Electric Bill is So High with Solar Panels
There’s a number of different factors that could be inflating your utility bills to more than expected. Let’s take a look, starting with the most likely candidates.
System Not Working at All
Actually, this is usually not the cause of high electricity bills but it is the first place to check. Most solar panel systems work in a very reliable manner as there are few moving parts and they are built to last decades.
Of course, it is possible that your solar array is not generating any electricity at all. This is usually down to lazy or poor installation that has not been properly checked. And of course, you’ll see no reduction in bills if it’s not being offset with solar.
Solution: All systems should have energy monitoring via the solar inverter or dedicated monitor. You will instantly be able to look at the data to see whether you are generating any solar power. If you don’t know how to do this then you must have a word with your installer. During the installation, you should ensure the compact sets up the monitoring and runs you through how to use it correctly.
Misrepresented Sale and Install
Solar sales teams love to oversell the systems. Often they will push the truth about how much electricity your solar panels will generate. From less honest companies, your projections can be based on maximum and perfect performance of the system. In reality, a solar array never delivers 100% of its capabilities… There’s too many variable factors including shading, weather, and orientation.
For example, energy production will reduce slightly if the panel is not facing true South. This doesn’t mean the installation is bad, but often rooftops can face South West, South East, and so on. This orientation away from true South will result in a drop in performance that the installer did not account for in the sales pitch.
Solution: To be honest, unless you can remove the issue (like shading from a tree branch) then you will have to live with the lesser power output. If you are willing and have space, you can add more solar panels to increase the size of your array to make up the difference.
Changes in Energy Usage
I’ve seen many people get very greedy when they first install solar panels. They think that they don’t need to worry about how much electricity they use because of this free supply from the sun. Well, this is usually a costly attitude if you decide to run your AC all the way through the summer, leave lights on, run electric heaters all day, and become altogether careless with your usage.
In addition, the world is moving quickly into an electrical age with every facet of life requiring electricity. Perhaps things have crept into your life that increases your usage. For example, you might be working from home or have an electric car. Electric cars will suck up a lot of energy you might not think about. It can easily add 10-15kWh a day. To give you an idea, you’d need an extra 12 solar panels to charge a Tesla!
Solution: Analyze your energy usage to see if you’re being careless anywhere. You’d be surprised at how much you can cut back by being more aware. Plus if you’ve made any big changes then account for them in your costs. An EV might increase electric bills but you’ll be saving more in not paying for gas fuel.
Misunderstanding of Net Energy Metering
Poor communication is rife in the solar industry. Installers don’t always do a great job of explaining how solar panel systems work. In fact, I’ve met people who were surprised they still had electric bills dropping through the letterbox…
Your electricity supply works with Net Energy Metering (NEM).
This means you work in tandem with the main grid. Your solar energy is either used to power your home or send excess to the main grid. When you use solar power to run your home it is completely free. Any excess sent to the main grid earns you credit with your utility company. You are selling electricity to the main grid in this case.
You also buy electricity from the main grid like in a normal house. You will draw power from the main grid when your solar panels don’t produce enough electricity to match your consumption. For example, at night when the sun goes down and solar panels don’t work.
To pay for this electricity bought from the main grid you will use the credit earned from selling solar power. But once this credit is used up, you will then pay for electricity just like normal.
If your overall electricity usage far exceeds your solar production, you will be left with large bills. Most people will have some type of electric bill to pay, as it requires a lot of solar panels to run a whole house!
Solution: Take the time to understand how NEM works. Ask your installer to explain it to you and calculate what you can expect to pay.
Delayed Payments ‘True-up Bill’
When you’re using Net Energy Metering, you don’t actually pay your electric bill each month. This is because day-to-day electricity production varies dramatically with solar panels. So it is easier to settle up over a longer period of time, usually once a year.
Although you might receive monthly energy usage statements from your utility company, you’ll only pay a bill once a year. This can leave you with a huge bill at the end of the year if you’re buying a lot of electricity from the main grid.
At the end of the year, your utility provider will ‘True-Up’ the electricity usage. In simple terms, they will compare how much electricity you’ve sold and how much you’ve bought. If you’ve bought a lot more than you’ve sold to the grid then a hefty bill will be due. It could be thousands of dollars! Although, you might only see a small difference on each monthly statement, when totaled up over a year it can be a shock.
Solution: Keep tabs on your statements each month to make sure you’re not racking up a huge true-up bill.
ToU Tariffs
It’s becoming popular to use solar panels in order to help offset Time of Use (ToU) tariffs. Many energy suppliers change energy prices based on demand. This means electricity will be more expensive to buy at peak times, like evenings, and cheap at off-peak times, like the middle of the night. If you have a ToU tariff then you should be careful to balance your energy usage.
For example, using a lot of electricity during the evening when your solar panels stop working could be expensive. If you run all your appliances during peak times then the electricity you buy from the grid will be costly.
Solution: Run appliances during off-peak times or during high solar production. For example, don’t turn your dishwasher on straight after dinner. Don’t use your washing machine when you get home from work. Try to time it so you use electrical appliances during off-peak times or strong sunlight hours so your solar panels provide best returns. In addition, battery backups can help to reduce ToU bills. You can supplement using battery power during peak times and recharge them with cheap electricity during off-peak times.
Time of Year and Weather Conditions
Electricity production from solar panels varies dramatically, even over the course of a single day the weather can play havoc. That is why you should judge its efficiency over the course of months and years, not day to day.
That being said, you might still get a spike in electricity bills during certain times of the year. For example, adverse weather conditions in the winter can severely reduce performance. Although, the average should flatten out over a year with peaks during the summer months. (That’s why utility companies use true-up billing mentioned above.)
Of course, you might still get the shock of a large statement during winter months. And you’re quite right to investigate to check everything is ok. For example, during the holidays electricity use can spike with the whole family at home, plus lights and decorations running 24/7. Then if you combine this spike with overcast or rainy conditions, you’ll be buying a lot of energy from the main grid.
Solution: It’s something to keep an eye on, but don’t worry unless it’s a long-term problem. One bad month of solar production will be a footnote over a whole year. In fact, it won’t make much difference once things average out. You might make your money back when you take a summer vacation and your solar panels are selling lots to the main grid when you’re not home.
Dirty or Damaged Solar Panels
Down of power all the time? Then make sure your equipment is clean and well maintained. Generally, solar panels need little doing to them and even the rain does a good cleaning job.
Solution: If you feel like your performance is lower than usual, then make sure they are clean. Anything blocking sunlight from reaching your solar cells will cause efficiency losses. Plus it might be worth having your installer give it a once over to check the wiring and solar inverter.
Long Term Degradation
Solar panels are built to last a long time. In fact, you should have a power output warranty for 25 years!
But don’t expect them to perform like new after a decade or two. Solar cells degrade slowly over time, this should be no more than 1% efficiency loss per year. That is a small amount, but that’s still 10% per decade. So after 20 years, you’ll only be getting 80% performance compared to new. You might only notice this if you’ve had the equipment for a long time and are comparing energy production over the year. Or you have bought a house with solar panels and are looking at solar panel power and energy production.
Over the years, inflation will drive up electricity prices while solar panels slowly lose efficiency. This will naturally increase your bills.
Solution: The only thing you can do is to replace the solar panels. If you’ve exceeded the warranty period and performance is dropping off significantly then it might be time for a fresh set of panels.
High Electric Bill with Solar Panels Summary
You will still receive electricity bills with solar panels on your house because you still buy energy from the main grid.
It’s tough to run a whole house using solar panels and you’ll need to top up your supply via your utility company.
As you’re still hooked up to the main grid it can result in unexpected large bills. Usually this is due to a faulty system or a misunderstanding of how solar panels work.
Either way, don’t always assume it is a mistake by your electric company, this is rare. The way you are using your energy is the number 1 culprit and a common theme in the discussion above.
