Can I Sell Solar Power to Generate Income?

A common misconception about solar is you can sell the energy your array produces to generate income from the utility. Unfortunately, it doesn’t work that way for the average solar investor. It is possible for large solar development companies to make money selling electricity. That is not, however, the case for small solar owners. Instead, solar keeps the money in your pocket that you would have otherwise been paying to the utility company for your monthly electric bill. Your solar array “makes” you money not by generating revenue but by reducing expenses.

That is not to say, however, that you aren’t compensated for electricity sent back to the grid. You usually are. The payments, however, usually simply offset the charges for when you do have to pull power from the grid. Utility policies and government regulations dictate how you will be compensated for the production sent back to the grid.

How Utility Companies Compensate You For Solar-Generated Electricity

The primary method of compensation for solar energy is net metering or net billing. This includes utilities in Iowa, Illinois, and Wisconsin. Through net metering, you are not selling this electricity to the utility. Rather, you’re exchanging it for later use when the solar is not producing enough to cover your consumption. The advantage of net metering is you are credited for “selling” the electricity at the same retail price that it would cost to buy it. With net billing, you generally “sell” the power to the grid at a lower wholesale price.

Many utilities limit the size of net metering-eligible solar installations to 100-110% of their average usage. The limits on net metering are intended to promote solar installations that only generate enough energy for their own demand.

What if you opt to not net meter? The compensation you receive for the energy you “sell” will be far less than the retail rate you would consume from the grid or receive via net metering. A solution to keeping your energy and consuming it on your schedule, versus “selling” back to the utility on-demand at a lesser retail rate would be to store your clean, renewable energy using a battery storage unit. Learn more about battery storage options here: https://eaglepointsolar.com/solar-storage-benefits/.

How Solar Energy Makes You Money

While the utility is not going to send you a check when you become a solar owner, you will still see a return on your investment. First, federal and state incentives lower the cost of going solar. This makes the break-even point lower than the actual cost of solar panels and installation. These include the solar investment tax credit, accelerated depreciation for businesses, federal grants, and regional grants or credits. From there, your return comes from the monthly savings on your electricity bill. Once you reach the break-even point from your initial investment, you’ll have solar-produced electricity for the rest of the life of the system. That could be 40 years or longer. If you have chosen not to go solar, your cost of continuing to purchase your electricity from your utility will continue to rise every year. Over the course of 30 years, the amount you paid to your utility will be far greater than the cost of a solar array. Therefore, for solar owners, the savings continually adds up every day the system is able to harness the power of the sun and produce clean, affordable, renewable energy.

Related Reading

Solar Net Metering Changes Coming to Illinois in 2025

The Difference Between Net Metering and Net Billing