How Net Metering Works in Pennsylvania

If you have solar panels, or you're thinking about getting them, it helps to know how your electric bill works with solar. It's called net metering: in sunny months your bill can drop to zero or nearly zero while your credits build up. In darker months you use those credits. This guide explains how it all fits together, so you can read your bill with confidence and get the most from your system.

It's written for any Pennsylvania electric utility. Each utility labels and groups its bill lines a little differently, so keep your own bill and your utility's net metering tariff handy. Examples sometimes use PECO wording to illustrate, but the core rules apply statewide.

How this guide is organized:

• Part 1 and Part 2 explain your bill and how net metering works on a standard residential rate.
• Part 3 covers what to look for on your bill.
• Part 4 covers Time-of-Use (TOU) rates.
• Part 5 covers businesses, including demand charges and virtual net metering.
• Part 6 covers the Pennsylvania regulations in detail, followed by a short note on other utilities, tips, and FAQ.

The short version

Full retail credit. Pennsylvania net metering credits you at the full retail rate (generation + transmission + distribution) for each kWh you send to the grid, up to what you use in that billing period.

Banking. In months when you send out more than you use, the extra kWh go into a bank and carry forward at full retail value to later months.

Year-end settlement. The net metering year runs June 1 to May 31. Any kWh left at year end are paid to you at the price to compare, which covers generation and transmission (on TOU, see Part 4). The distribution part of leftover credits is forfeited at year end, and the bank starts fresh in June.

Fixed charges. The fixed monthly customer charge (and, for businesses, any demand charge) is billed separately from your kWh credits.

Typical pattern. Very small bills in summer while your bank grows, then you draw on the bank in winter.

Part 1: What's on your bill

Rates change several times a year, so this guide doesn't quote real prices. Look at your current bill for those. Every dollar figure in the examples is made up for illustration.

Generation (supply)

The electricity itself. You get it either from your utility's default service (if you haven't chosen a supplier) or from a competitive supplier you picked. We're not aware of any competitive supplier that offers net metering, so to get net metering credit for your solar, use your utility's default service and cancel any third-party supplier.

Transmission

The cost of the high-voltage, long-distance lines that carry power from power plants to your utility's local system. In Pennsylvania that regional grid is run by PJM Interconnection, and transmission rates are set by federal regulators. In Pennsylvania, transmission is usually billed together with generation and is part of the price to compare.

Distribution

The cost of the local grid your utility owns and maintains: the substations in your area, the neighborhood poles and wires, the transformer, and the line to your house. The Pennsylvania Public Utility Commission (PUC) sets distribution rates in utility rate cases. Distribution and the customer charge are your utility's own regulated business, while default-service generation is passed through at cost, with no markup. Distribution is billed per kWh, and you pay it to your utility even if you buy electricity from a competitive supplier.

Customer charge

A fixed monthly fee for having an account: the meter, meter reading, billing, and customer service. It's the same every month, however much you use or your solar produces. It's paid from your account balance, or from a dollar credit such as the year-end payout, rather than from kWh credits.

Price to compare

Your utility's default-service price for generation plus transmission. The PUC defines it as "the sum of all unbundled generation and transmission related charges." It appears on your bill so you can compare supplier offers. For solar owners, it's also the rate used for the year-end payout. It doesn't include distribution or the customer charge.

What "delivery" means on your bill

People in the industry often say "delivery" to mean transmission plus distribution: the cost of getting power to you, as opposed to the power itself. Bills group these lines differently. One utility might list the customer charge and distribution under Delivery and transmission under Supply; others organize the lines their own way.

Taxes

Pennsylvania's Gross Receipts Tax is usually built into the rates instead of shown as its own line. A bill may show "Taxes & Fees: $0.00" and then say in a message how much tax is included.

Part 2: How it works on a standard residential rate

On a standard (flat) residential rate, net metering is simple: one month, one net number, one bank.

Each month the utility subtracts what you sent to the grid from what you took from it:

• You used more than you sent out. You're billed for the net kWh at the regular rate (generation, transmission, and distribution), after first using any kWh in your bank.
• You sent out more than you used. You pay only the customer charge, and the extra kWh go into your bank.
• Your bank carries forward month to month at full retail value and covers later months' net usage.
• At the May true-up, any kWh left in the bank are paid out as a dollar credit at the price to compare (on TOU, see Part 4). The bank then starts again at zero in June, and the dollar credit pays upcoming bills.

Example 1: A home on a standard rate (made-up numbers)

These prices are made-up round numbers for illustration, not real rates: customer charge $10 per month; generation 10¢, transmission 2¢, and distribution 8¢ per kWh, so full retail is 20¢ and the price to compare is 12¢.

A summer month. The home took 600 kWh from the grid and sent 1,000 kWh back.

• Net: 400 kWh sent out. 400 kWh go into the bank.
• Bill: $10 (customer charge only).

A winter month. The home took 1,500 kWh from the grid and sent 300 kWh back.

• Net: 1,200 kWh used. The bank holds 900 kWh (after several sunny months), and all 900 are applied.
• The remaining 300 kWh × 20¢ = $60.
• Bill: $10 + $60 = $70. Without the bank it would have been $250, so the bank covered $180 of usage at full retail value.

At year end (May). Suppose 500 kWh are left in the bank.

• They're paid at the price to compare: 500 × 12¢ = $60 dollar credit, which goes toward upcoming bills.
• The bank resets to zero in June.

Tip: A system sized to your yearly usage gets the most value. Most of its credits are used during the year at full retail, rather than waiting for the year-end payout.

Part 3: What to look for on your bill

Every utility lays out its bill a little differently, so exact labels and section names will vary. Focus on these pieces and how they relate:

• Meter readings. Look for the kWh you took from the grid (imports) and the kWh your system sent to the grid (exports). The difference is your net kWh for the month.
• Charge lines. In a month when you used more than you exported, the per-kWh charges (generation, transmission, distribution) should line up with your net kWh after any banked kWh are applied. In a month when you exported more, you may see only the fixed customer charge.
• Your bank. Most bills show the kWh banked at the start of the period, the change during the period, and the remaining balance that carries forward. At the May true-up you will also see the kWh settled.
• Year-end payout. On the May bill this appears as a dollar credit (the name varies by utility). Any remaining dollar credit carries forward and offsets future bills.
• Price to compare. This is the rate used for the year-end payout of leftover kWh. It is also the number you can use to compare supplier offers.

The exact wording differs by utility, but the relationships above are consistent under Pennsylvania’s net metering rules.

Part 4: If you're on a Time-of-Use (TOU) rate

Everything above still applies on TOU, with one key difference: your generation credits are banked by time period.

How TOU banking works

On TOU, the utility typically keeps a separate generation bank for each pricing period and nets imports against exports within that period. Transmission and distribution are usually netted on the whole month’s net kWh regardless of time of day. Exact windows and banking rules are set by each utility’s tariff.

As one example, PECO’s Peak period is weekdays 2 p.m.–6 p.m., Super Off-Peak is midnight–6 a.m. every day, and Off-Peak is everything else. Solar produces nothing during Super Off-Peak, so that bank stays empty. On a standard rate, leftover kWh are paid at the price to compare. On TOU, leftover generation credits in each period bank are paid at that period’s rate (plus transmission) in effect when the excess was generated. Other utilities use different windows and may track banks differently.

Example: A real TOU home (anonymized PECO customer)

A home with solar, an EV, and electric heat on PECO TOU:

• Winter 2025–26: Peak and Off-Peak banks covered generation in those periods. In January they covered 139 Peak and 2,061 Off-Peak kWh. In February the home used its last 412 Off-Peak kWh while about 1,581 Peak kWh stayed banked. Distribution and transmission were billed on net kWh; Super Off-Peak use was billed on its own.
• May 2026 true-up: 2,291 Peak and 636 Off-Peak kWh were paid out as a dollar credit. That credit then paid every bill from May through October 2026.
• Distribution bank: After the May reset it grew through the summer (reaching 2,491 kWh by early October), giving a larger head start on winter distribution charges.

Getting the most from TOU

• Export during higher-priced periods and shift flexible use (such as EV charging) to the lowest-priced period.
• Leftover period credits are paid at that period’s own rate at true-up, so there is no need to force them to zero during the year.
• Watch the distribution bank: it is netted on monthly totals, and any distribution kWh left at true-up are forfeited.

TOU tends to suit homes that export a lot during Peak hours and do most other use in lower-priced periods. A standard rate is simpler. Compare a full year of your own bills before choosing.

Part 5: Businesses and demand charges

Net metering works the same basic way for businesses: full retail credit up to usage, monthly banking, a year-end payout at the price to compare (on TOU, see Part 4), and a June 1 reset. A few rules are specific to non-residential customers.

Rules for non-residential systems

Size limits (§ 75.13(a)). Systems at non-residential locations can be up to 3 MW. They can be up to 5 MW if the system is made available to the utility during grid emergencies, or is part of a microgrid that keeps critical infrastructure running (like hospitals, emergency services, or water treatment). The detailed conditions are in § 75.16 and the utility tariffs.

Commission approval at 500 kW and up. Systems of 500 kW or more need PUC approval to net meter (§ 75.17).

On-site load. As with homes, there must be electric use behind the meter that's independent of the solar system.

Meter aggregation (§ 75.14). A business or farm with several meters on nearby properties it owns or leases can combine them for net metering, often called virtual net metering or virtual meter aggregation. Credits are applied first to the meter the solar system feeds through, then shared equally across the other meters. This is limited to properties within two miles and inside the same utility's territory, and virtual aggregation is done at the customer's expense.

Demand charges

Many commercial rates include a demand charge, based on your highest kW draw during a short interval in the billing month. Demand charges are billed separately from energy. Banked kWh credits apply to energy charges; demand is billed on its own.

Daytime solar can help trim demand charges. If your business hits its peak during the day, your panels are producing at the same time and supply part of that load. That can lower the peak kW the meter records. Your utility can provide a demand profile showing when your peaks happen, which helps you see the potential.

Example 2: A small business (made-up numbers)

Made-up round numbers for illustration, not real rates: customer charge $30 per month, full retail energy 15¢ per kWh, demand charge $10 per kW.

The business's peak usually happens in the early afternoon, when its panels are producing.

Energy. The business took 8,000 kWh from the grid and sent 2,000 kWh back, for 6,000 net kWh.

• With no bank available: 6,000 × 15¢ = $900.

Demand.

• Before solar, the monthly peak was 60 kW: 60 × $10 = $600.
• With midday solar output, the recorded peak dropped to 48 kW: 48 × $10 = $480.
• Bill: $30 + $900 + $480 = $1,410.

Tips for businesses:

• Spread out big loads. The demand charge is set by your single highest interval, so staggering compressors, chillers, and EV fleet charging instead of starting them all at once keeps that peak down.
• Ask your installer to review your interval data to size the system for both energy and daytime demand.

Part 6: The Pennsylvania rules in detail

Net metering in Pennsylvania is governed by 52 Pa. Code § 75.13, and each utility puts it into practice through its own net metering tariff. In plain English:

Who qualifies (§ 75.13(a)).

• Residential systems can be up to 50 kW.
• You need household electric use on your side of the meter that's independent of the solar system itself.
• The system owner or operator can't be a utility.

(Business rules are in Part 5.)

Full retail credit, up to your usage (§ 75.13(d)). Your utility credits you "at the full retail kilowatt-hour rate, which shall include generation, transmission and distribution charges," for each kWh you produce, "up to the total amount of electricity used by that customer during the billing period."

Extra kWh carry forward (§ 75.13(d)). If you send out more than you use in a billing period, the excess kWh "shall be carried forward and credited against the customer-generator's kilowatt-hour usage in subsequent billing periods at the full retail rate," and keep adding up until year end. Utilities run that year from June 1 to May 31, the "PJM planning period."

Year-end payout (§ 75.13(e)). At year end, your default service provider pays you for remaining excess kWh "at the DSP's price to compare rate." (Under TOU tariffs such as PECO’s, the payout uses each period’s rate; see Part 4.)

Distribution value at year end is forfeited. The year-end payout covers generation and transmission. The distribution part of leftover credits isn't paid out or carried into the new year; the bank resets and starts building again in June.

• If you buy from a competitive supplier: the regulation says this directly. Unused distribution credits "shall be zeroed-out," and "Distribution credits are not carried forward into the next year" (§ 75.13(f)).
• If you buy from your utility: the same result follows from how the year-end payout is calculated.

Check your utility's tariff for the details.

No special solar fees (§ 75.13(j) and (k)). Net metering customers pay the same rate structure as other customers on the same rate. Utilities can't add a fee or charge just because you have solar, unless it applies to other customers too or the Commission has authorized it.

Supplier customers (§ 75.13(f)). If you buy generation from a competitive supplier, your supplier contract sets how generation is credited, and the utility still credits distribution kWh. We're not aware of any supplier that offers net metering, which is why Part 1 recommends staying on your utility's default service.

Switching suppliers triggers settlement (§ 75.13(g)). If you switch suppliers, the utility "shall treat the end of the service period as if it were the end of the year." Timing a switch for right after the May true-up keeps your full year of banking.

How other Pennsylvania utilities compare

Every Pennsylvania electric utility follows the same state regulation, 52 Pa. Code § 75.13, so the core rules in this guide apply whether you're served by PECO, PPL Electric, Met-Ed, Penelec, Penn Power, West Penn Power, or another Pennsylvania utility: full retail credit up to your usage, banking through May 31, a year-end payout for leftover kWh, and a fresh start in June. The differences are mostly in how each bill is laid out and labeled, and, on TOU rates, in how the banks are tracked. Tariffs change, so check your utility's current tariff, and ask the utility how your bill shows your bank.

Tips to get the most from your solar

Don't worry about when you use power. On a standard rate, everything nets out over the month, so running the dishwasher at noon or at midnight costs the same. On a TOU rate, see Part 4.

Size the system to your yearly usage. Credits deliver the most value when they're used during the year at full retail.

Plan for the seasons. Summer builds your bank and winter uses it. The year-end credit, or budget billing where it's available, can keep monthly costs steady.

Time any rate or supplier change. Right after the May true-up keeps your full year of banking.

Read your bank each month. It tells you how your system is doing against your usage.

Questions about your own bill? Contact Trifecta Solar and we’ll walk through it with you. If you have an existing system that isn’t producing what it should, see our solar panel service and repair page.

FAQ

Why is my summer bill so small?

When you send out more than you use, you pay only the customer charge, and the extra kWh are banked at full retail value for later.

What happens to my bank at year end?

Leftover kWh are paid out at the price to compare (generation + transmission; on TOU, see Part 4) as a dollar credit toward future bills. The distribution part is forfeited, and the bank starts fresh in June. Check your utility's tariff for the details.

Do I get full retail value for everything I export?

You get full retail value for every kWh that offsets your usage, in the same month or later in the same year. kWh left at year end are paid at the price to compare. That's why a system sized to your yearly usage gets the most value.

Can solar cover my customer charge?

Yes, through a dollar credit on your account, like the year-end payout. kWh credits go toward the per-kWh charges.

Does solar lower a business's demand charge?

It can. Banked credits go toward energy, not demand. But daytime production can trim demand charges for businesses whose peak happens during the day.

Does this work the same with every Pennsylvania utility?

The core rules come from state regulation, so the basics match. Bill layouts, labels, TOU options, and TOU banking vary by utility. Check your utility's tariff.