Electricity (Compensation) Rate
Please enter the avoided cost rate of electricity produced by your solar system.
This can significantly impact the value and payback of your system as this number is used to value any energy the system produces that you do not use instantaneously. The simplest (and most financially beneficial) case is full retail net metering, where every kilowatt-hour (kWh) produced from the solar installation offsets a kWh from the utility bill at the full retail rate. In this situation it is appropriate to use the current utility rate (kWh) as the electricity rate within this calculator.
In other situations and due to specific electric utility tariff structures or regulatory policies, solar energy cannot be offset on a one-to-one basis and a different rate applies. For example, your utility may compensate you a wholesale rate (~2-3 cents/kWh) or a value of solar rate, which is usually in-between the full retail rate and the wholesale rate, and in some cases, you may not be credited at all for this excess energy production.
Policies on this compensation vary widely by state and sometimes electric utility. Explore this guide for a high-level overview of each state’s policies, as of 2021. Solar contractors are usually well-informed about local net-metering compensations and can inform you of this number. Additionally, you can reach directly out to your electric utility provider and ask how they credit you for excess energy produced by your solar system.