Path-Q Solar
How should minimum monthly electricity charges be included in solar savings estimates?
Answer
Treat minimum monthly charges and other charges that solar cannot eliminate as costs that remain after installation. Subtract them from the bill-reduction estimate rather than assuming solar can reduce the entire pre-solar bill to zero.
Key points
- Separate energy charges from fixed, minimum, demand, delivery, and other non-bypassable charges.
- A bill may have a lower energy component but still retain a required monthly payment.
- Use the actual rate structure and billing rules rather than applying a percentage reduction to the total bill.
- The treatment of exported energy and credits can also affect the remaining bill.
What it depends on
- Current tariff and billing structure
- Minimum bill or fixed-charge rules
- Solar self-consumption and exports
- Other non-bypassable charges
- Future rate changes
Risks and trade-offs
- Ignoring minimum charges overstates annual savings and understates payback time.
- A system sized to eliminate energy charges may produce excess exports.
- Rate changes can alter the value of solar even when production is unchanged.
Information you may need
- Recent complete electricity bills
- Detailed tariff or rate schedule
- Export-credit treatment
- Expected production and self-consumption
Your next step
What to do next
Build the estimate from bill components and leave minimum and non-bypassable charges in every projected month unless the tariff explicitly allows them to be offset.
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Some details may depend on your location, installer, utility, incentives, regulations, or specific property.
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