Customers are billed for power in various ways by different utility companies. You will pay these prices depending on how much kWh you consume each month.
Fixed, time-of-use and variable rates are the most popular types of rates.
Kinds of Utility Bill Plan
Fixed-rate
The easiest to comprehend utility prices are those with a fixed rate. You will be paid the same amount per kWh regardless of what time of day, what day of the year, or how much power you consume.
Time-of-use
Each utility that utilizes time-of-use rates has a different pricing structure. You are essentially charged a different price depending on the time of day you use your power under time-of-use pricing.
For instance, most individuals work between 9 AM and 5 PM. The peak electricity use occurs both before they depart for the day and after they get home at night. Utility providers try to dissuade customers from consuming power at peak times by charging them extra money.
Varying rates
The most pernicious tariff structure, variable prices fluctuate erratically based on how much it costs utilities to deliver electricity that particular month. Your home’s power expenses might vary depending on various circumstances, from higher transportation costs to a lack of supply.
Depending on the season or whether a client consumes more energy than a certain number of kWh per month, variable prices may increase. Every utility is unique.
Consumers can shop around using variable-rate plans where utility monopolies do not exist and are not bound by contracts. If an extreme weather event happens and prices unexpectedly rise, this might put you in a difficult situation.
How Does Your Utility Bill Plan Affect Your Residential Solar System
Most residential solar projects are on-grid solar systems since this setup is relatively cheaper to install, easier to maintain, and even safer to use to some extent. Since an on-grid solar system is still hooked up with your traditional electric line, the charges it may produce may still come with delivery and maintenance fees.
If you have an on-grid solar project or are planning to get one, it’s best to check your utility bill plan.
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