Once you have a solar panel system installed, you’ll be able to generate your own electricity and save money by swapping to a cleaner energy source, instead of having to rely on grid-supplied power. But, you might need a little help understanding your electricity bill before you swap to solar, and afterwards:
Kilowatt (kW) and Kilowatt-hour (kWh) and usage explained
Your usage as a homeowner, is the amount of power consumed by your property within a fixed period of time, and on your electricity bill, you’ll likely see both monthly and annual usage or consumption shown as ‘kilowatt-hours’.
Electrical power is rated in watts, with a kilowatt being equal to 1,000 watts, and a kilowatt-hour (kWh) is the measurement of actual electrical energy consumed over the period of an hour.
If you have a 1,000-watt (or 1 kWh) microwave for example, it would take one hour of usage to consume 1 kWh of electricity, and a 50-watt lightbulb would need to be running for around 20 hours (50W x 20h = 1,000Wh) to equal 1 kWh of electricity consumption.
Off-peak and demand charges
Electricity rates vary based on the exact moment a home consumes energy on-site with a demand or time-of-use billing structure. With an off-peak billing structure, customers are charged more for their electricity when demand is high or at its peak in a utility’s service area, typically shown as ‘on-peak’, or ‘off-peak’ on a utility bill.
With smart energy management, homeowners are able to save money on demand charges by only using appliances that consume high-power, in off-peak hours. Solar energy systems that generate electricity in the afternoon, can help homeowners use more of their own power during periods of high demand, although this isn’t always as simple as it might sound.
Smart meters, net metering and customer production
When a solar energy system is installed at your home, your traditional utility meter on the side of your home, will be replaced with a smart meter.
Net metering means that your electricity usage will be measured against your solar energy system’s production, directly, to resulting in a ‘net’ energy consumption that you’ll be billed for.
Showing as ‘customer production’ or ‘customer energy generation’ on your electricity bill, is your solar energy production, and if your net metered solar panels produce more energy than you consume in a single month, you might have a ‘negative’ energy electric bill with energy credits that are rolled over into the next billing cycle.
For more guidance on understanding your electricity bill once you make the switch to solar, chat to your local solar provider, who will help talk you through it and make sense of your savings.
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