Two different values for the same electricity
Electricity produced while your household is using it can reduce imported energy. Its value is the energy charge you avoid, subject to your tariff. Electricity produced when your home does not need it goes to the grid and is settled under an export rule. That rate may be lower than retail.
A simple tariff example
Suppose panels produce 8,000 kWh per year, your home uses 50% of it directly, retail electricity costs 25¢/kWh and export credit is 5¢/kWh. Direct use is worth $1,000 and exports are worth $200, for $1,200 in gross annual savings. Valuing all output at 25¢ would suggest $2,000 and overstate this example by $800.
| Energy flow | Calculation | Annual value |
|---|---|---|
| Self-used | 4,000 kWh × $0.25 | $1,000 |
| Exported | 4,000 kWh × $0.05 | $200 |
| Total gross savings | Before equipment and upkeep costs | $1,200 |
Questions for your utility
- Is settlement hourly, monthly or annual?
- Are exported kWh credited at retail, avoided cost or a time-varying rate?
- Do credits expire or roll over, and are there caps?
- What fixed, minimum, demand or solar-specific charges remain?
- Does adding a battery or expanding a system change grandfathered tariff eligibility?
When a battery might help
A battery can store generation for later household use, subject to losses and its usable capacity. It may be valuable when export compensation is low and evening prices are high, but the extra avoided charges must justify the battery cost and replacement risk. Backup power has a separate value that is not captured by simple bill savings.
California requires tariff-specific modeling
CPUC provides separate guidance for net energy metering and the net billing tariff. Do not use a generic full-retail export assumption for every California customer. Identify the utility, enrollment date and applicable tariff before estimating savings. Our annual model cannot reproduce an hourly avoided-cost export schedule.
Sources and verification
Links provide primary references or verification tools. Linking a source does not mean every calculator default is reproduced from it. See our data limitations.