Utility Terms

35 Terms To Help You Prepare For Your Next Bill From Your Utility Provider

Annual Consumption – The amount of energy you consume over a period of one year, measured in kilowatt-hours (kWh). You can find this information in your electric bill or by contacting your utility or electricity provider.

Autonomous System – Also known as standalone solar PV systems, meaning the system is not grid-tied or interconnected to a utility’s electrical grid. Autonomous system applications usually include scientific/geographic data monitoring, telecommunications, and basic lighting.

Base Load – The minimum amount of electricity demand over 24 hours on an electrical grid. Base load power plants use fuel sources that can continuously supply this minimum electricity demand without any intermittency.

Baseline – Refers to your Tier 1 allowance of energy. Many electrical utilities allot you a certain amount of energy consumption at a given price or rate; when you surpass this baseline, the price or rate ($/kWh) for your energy goes up.

Cents per kWh – How the cost of your energy is measured ($/kWh). It’s important to understand what you currently pay and what you’ve historically paid for electricity in order to compare to the cost of solar energy

Delivery/Transmission Service – Refers to the processes of delivering and transmitting energy from its source to you, the end-user. On your electric bill, you might see a charge for this service parsed out from your total electrical charges.

Demand – Refers to the maximum amount of electrical power being consumed at a given time. This is usually measured in kilowatts (kW). Demand is different than consumption.

Consumption – The amount of energy consumed over time, usually one hour, measured on your electric bill in kilowatt hours or kWh.

Distributed Generation – Refers to instances where energy is generated where it is also consumed – for example, a residence. Energy is produced by a residential rooftop solar panel system and fed into the home’s electrical infrastructure to be consumed by appliances in the home or to be fed into the local electrical grid.

Electric Bill – What you receive in the mail or online from your electricity provider or utility. Your bill will contain electric charges that are affected by factors including, but not limited to: electrical consumption (kWh), electrical demand (kW), rate schedule, taxes, fees, and miscellaneous charges.

Electric Meter – The device on your home or building that measures electricity consumption (in kWh) and sometimes demand (in kW).

Electrical Distribution Grid – A network of power plants and consumers (such as homes, businesses, etc.) connected by transmission and distribution wires, operated by one or more control centers.

Feed in Tariff (FIT) – An economic policy intended to encourage investment in and production of renewable energy. FITs are usually payments to normal energy users for the renewable energy they generate and feed into the grid. FITs are usually assigned a dollar amount measured in cents per kWh, for example: $0.16/kWh.

Green Button Data – A way to download or connect to your utility usage data (electricity, gas, water) to learn about one’s resource usage patterns and make informed decisions regarding those resources. Green Button Data from your utility is an easy way to share your electrical usage information with a potential solar provider. This data is necessary for sizing the system appropriately with your needs and goals, as well as local guidelines.

Grid Parity – The term used to describe when an alternative or renewable energy source, such as solar or wind, can generate power at a levelized cost of energy (LCOE) that is less than or equal to the price of grid power. Many areas in the United States have reached or are close to grid parity.

Grid-Tied – A semi-autonomous electrical generation system which connects to existing electrical infrastructure in order to feed excess electricity back to the electrical grid.

Grid-Connected – Another term for a grid-tied system.

Interconnection Agreement – A document you’ll sign with your utility before interconnecting your solar PV system into their grid. The interconnection agreement establishes rules, regulations, terms, and conditions surrounding net energy metering, rate schedules, acceptable use policy, and other technical standards.

Interconnection/Interconnected – Term used to describe a solar PV system that is connected and interactive with the electrical grid. After receiving PTO, or Permission to Operate, for your grid-tied solar PV system, you can activate the system. Once the system is activated, it is said to be interconnected.

Interval Data Recorder (IDR) – A device or service that logs data relating to energy consumption and costs over time.

Monthly Consumption – The amount of energy you consume over the period of one month, which usually coincides with a normal billing period. Some electricity providers or utilities bill on a bimonthly schedule. Be sure to note the date(s) on which your electrical meter was read to determine your consumption over that relevant period of time.

Off-Grid – A standalone solar PV system, not interactive nor interconnected to the grid, is said to be “off-grid.” With respect to solar PV, a synonym for off-grid is “autonomous,” meaning they do not rely on grid power.

On-Grid – Synonymous with grid-tied, or grid-interactive.

Peak Load/Peak Demand – Refers to a period(s) of the day or night that coincide with higher than average electricity demand. On a time of use (TOU) rate schedule, electricity rates are often significantly higher during periods of peak demand.

Procurement Cost Adjustment – A charge expressed on your electric bill that is designed to serve as a true-up — to make sure the utility receives no more or no less than its cost for procuring generation services for customers on a standard rate schedule.

Rate Hikes – A term for increases in the price you pay for electricity ($/kWh). Some utilities’ electricity rates tend to remain constant, while many exhibit a pattern of increases year after year.

Remote System – A system that can be controlled or monitored from a remote location.

Smart Meter – An electronic device that records consumption of electricity in intervals of one hour or less. Smart meters communicate this data back to the utility, or another party, for monitoring and billing purposes.

Stand-Alone PV System – Another term for an off-grid system.

Supply Service – Some utilities and electricity providers parse out the charges that relate to your electrical service. Usually, those include supply and delivery/transmission.

Tiers – These are the allotments of kWh usage your utility or electricity provider affords you according to your rate schedule in a given billing period. Typically, once one consumes more than a “Tier 1” allotment, they enter the next tier, which has a higher price/kWh. Your Tier 1 allotment is also called your “baseline.” Some utility rate schedules have just one or two tiers, while others have more. Most tiered rate schedules only charge customers according to their total usage. However, time of use rate schedules, which can also be tiered, are becoming more prevalent as utilities try to align customer charges with their true costs of generation and delivery.

Time of Use (TOU) – A type of rate schedule on which the price of electricity ($/kWh) depends on the time of day or night and the season that the electricity is used. For example, on most TOU rate schedules, energy is priced higher during time intervals that coincide with peak demand (for example, 3PM-8PM M-F), and is priced lower during intervals of lower demand (typically late at night, very early in morning, or in the middle of the day). Ask Pick My Solar for assistance in better understanding your rate schedule, and how it plays into the economics of your solar project.

True-Up – On each subsequent anniversary of your grid-tied solar PV system’s interconnection, your utility will send you a true-up statement. This is a cumulative record of the net energy consumed and net energy supplied to the grid by the solar PV system. It’s important to understand that the net energy supplied to the grid is NOT the same thing as energy produced, as much of that energy may be used by circuits in your home. While your utility will still send you regular statements or bills for normal billing periods showing cumulative, year-to-date, monthly or bimonthly data, some utilities only require you pay for the cumulative annual charges that is reconciled on your annual true-up statement. Other utilities will require you to pay for relevant charges for each billing period following interconnection of your system.

Utility Bill – The bill you receive from your electricity provider that contains charges related to generating and delivering energy to your home or facility, plus any related taxes and fees. Your utility bill will contain a lot of information pertinent to your solar project such as your rate schedule, usage for the relevant billing period, fees, taxes, special programs or discounts, historical usage data, and total charges. If you already have solar, your utility bill should reflect your net energy consumed, net energy supplied to the grid or “received,” as well as any relevant, cumulative or year-to-date charges.