Going Solar in Pennsylvania

Excess Generation: If a solar system produces more electricity than the property needs (e.g., during sunny days when demand is low), the excess energy is sent back to the grid. In return, the utility credits the customer’s account at the retail electricity rate for the surplus energy produced. This is advantageous because retail rates are typically higher than the rates utilities pay for purchasing energy wholesale.

Annual Reconciliation: At the end of the billing year, if a customer’s solar system has generated more electricity than the customer has used over the course of the year, the remaining credits are rolled over, but at a reduced rate, referred to as the "price-to-compare" rate. This price is the utility's avoided cost of producing or purchasing electricity from other sources and is usually lower than the retail rate. This reduction incentivizes customers to size their systems appropriately and consume as much energy as possible on-site.

Utility Companies and Regulations: Net metering is available through Pennsylvania's major utilities, such as PPL Electric Utilities, PECO, Met-Ed, and West Penn Power. Each utility follows the state's guidelines for net metering, but the details of crediting excess energy and reconciling unused credits may vary slightly from utility to utility.

Impact on Bill Savings: While net metering provides substantial savings for solar customers, the reduced "price-to-compare" rate for excess energy credits means that some customers may see less-than-ideal compensation for the energy they export to the grid. This can influence the economic viability of solar installations for some homeowners and businesses.