Net Billing vs Net Metering

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Your private power replaces the electricity supplied by Xcel Energy, as in Option 1, plus any excess generation earns a bill credit (excess generation occurs when your private power system produces more electricity than your home or business consumes). The credit is determined by metering excess power in kilowatt-hours and multiplying it by the power rate or "fuel cost factor". This factor varies monthly dependent on customer class and Xcel Energy’s system-wide fuel costs. The "Net Billing" effect is realized when credit for excess private generation is subtracted from the total Xcel Energy bill. Option 2 carries a $20 monthly service fee, requiring a minimum amount of excess electricity to be produced to cover the fee. (Example: you produce an excess 400 kilowatt-hours in a monthly billing cycle, which is paid at a fuel cost factor of 3.3 cents, equaling a bill credit of $13.20) 

Source: Interconnection Options for Homeowners Infographic 22-07-517_TX-RooftopSolar_app_P04.pdf (xcelenergy.com) 

Net metering is a billing mechanism that credits private generation at retail rates for the electricity pushed onto the grid. For example, if a residential customer has a photovoltaic system on their roof that generates more electricity than the home uses during daylight hours, the extra electricity pushed back onto the grid earns the same per kilowatt-hour rate as the utility charges that customer for electricity. Different states may have payment caps or other rules, but Texas tariffs do not allow retail net metering. The state rules do allow excess electricity to be compensated at a lower “wholesale” per kilowatt-hour rate - the fuel cost factor or power rate. The power rate reflects the benefit of electricity produced by a customer without subsidizing that customer’s production. Specifically, the power factor credit does not reflect the full cost to deliver reliable, safe electricity during peak demand to all customers.

Source: Interconnection Options for Homeowners Infographic 22-07-517_TX-RooftopSolar_app_P04.pdf (xcelenergy.com)

Net metering generally provides a higher credit for excess electricity, offsetting part of the retail rate you pay for electricity from the grid. 

In contrast, Net Billing credits excess generation at a lower rate, reflecting the wholesale cost of electricity rather than the retail rate.

Additionally, Xcel does not do Net Metering in Texas, however (as mentioned above) Net Billing does work with Xcel and will reduce your electricity costs.  

As the local and best solar company in Amarillo, we are experts with working with connecting your solar panels with the prevalent electricity company in town, Xcel.

You will want to work with a company that knows how Net Billing and Net Metering works with Xcel in the Amarillo and surrounding areas.  If your solar system is not properly sized, you will pay for an excessively high solar system and an excessively high electricity bill.  Pure Energy has an exceptional track record of working with