Do You Have Solar but Still Pay High Electricity Bills?

You may find yourself in a situation of buying a house that has solar panels already installed – great news! However, you may also find yourself spending astronomical amounts of money on electricity bills.

Why is My Electricity Bill so High When I Have Solar Panels?

You may still receive high electricity bills even with a solar system installed and there are various reasons why this could be a problem:

1. Power Purchase Agreements (PPA)

If your system is under, you are agreeing to buy the electricity generated at a pre-established rate. The rate in question may not necessarily be lower than the current rate you are paying, dependent on the terms of the agreement.

Leasing

Leasing the panels may also put you in a position to pay a fixed monthly fee for the panels, regardless of the volume of electricity they generate.

2. Utility Rate Structure

Feed-in Tariffs (FiTs)

Your location and utility company can cause the net metering terms to vary. Some utilities offer less favourable Feed-in tariff options meaning you may not get full credit for any excess electricity your panels generate.

Time-of-Use Rates

If you are on a time-of-use rate plan, the cost of electricity varies depending on the time of day. The solar panels may not be producing the most electricity during peak rate periods, reducing any potential savings.

3. System Performance

Shading or Maintenance Issues

Your panels may not be operating at optimal efficiency due to shading from trees, dirt, or other maintenance issues. This can cause the amount of electricity to be generated to be less than possibly expected

Dirt and shade can have a huge impact on the operation of solar panels

System Size

The system size may not correspond to the amount of electricity your household is using. This can mean you still buy a portion of your electricity from the utility.

4. Contract Terms

Escalator Clause

Some solar leases and PPAs have an escalator clause that increases the price you pay on an annual basis. Over time, this could cause your solar electricity cost to become higher than utility rates.

Billing and Charges

There may be additional charges stipulated in the contract that offset the savings from the solar electricity.

5. Seasonal Variations

Production Fluctuations

Solar panel generation output can vary significantly when it comes to the different seasons. The winter months or cloudy periods will lead to a big drop in electricity generation, affecting your overall solar savings on electricity bills.

What Can You Do to See Savings on Electricity Bills?

To obtain a greater idea of why you are not seeing the savings you are expecting, you can:

If you want to read more about solar, you can visit our support hub:

Solar: What are Feed-In Tariffs and How Do They Work?
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