Connect with us

Hi, what are you looking for?


Clean Power

Retail vs Wholesale Energy Pricing: 1 Reason It’s Easy For Rooftop Solar To Be Cost Effective

Solar on House - Google - No License - Commercial Use Ok

Utility-Scale Solar Energy Pricing

In the media, when solar energy pricing is discussed as being cost effective or not, they are typically talking about utility-scale solar projects and how they compare on cost to wholesale prices from coal or natural gas power plants. Wholesale energy prices are of course lower than retail prices, so it’s not as easy for utility-scale solar projects to be cost effective in this case. (Though, solar projects have been underbidding fossil fuels in some locations, such as Texas and Minnesota in the US, and especially in many developing countries.)

Residential Rooftop Solar Energy Pricing

When residential folks are putting solar on rooftops, we only have to beat the price that we pay on our energy bills, which is the retail price. Consumers of course pay the higher retail rate, not the lower wholesale rate, which makes it easier for rooftop solar to beat the price paid to the utility company. This is one big reason why so many of us are putting solar panels on our roofs.

Net Metering Pricing

Net metering is when the utility company pays the energy producer for excess energy that flows into the grid and reverses the electric meter, thus reducing the electric bill and in some cases making the electric bill positive, causing the utility to pay the resident. In locations where net metering is legal (most of the United States), the utility company has to pay for the electricity that they receive.

Usefulness of Retail vs Wholesale Energy Pricing Distinctions

These pricing distinctions may be useful when making a decision to get rooftop solar. This info might reduce the possibility of confusion along the way.

Editor’s Note: This is pretty basic stuff that regular CleanTechnica readers should know, but it’s true that the matter is widely misunderstood and confusingly discussed in the media. Comparing the cost of rooftop solar power with wholesale electricity prices almost never makes sense, yet people do it over and over again, which of course turns other people (even less informed) off. And as Daryl noted in an email to me: “I’ve seen this info mentioned briefly in [CleanTechnica] articles on occasion, but I haven’t seen a short, straightforward article address this topic thoroughly.” So, help out educating the masses about this important matter by sharing this piece!

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Former Tesla Battery Expert Leading Lyten Into New Lithium-Sulfur Battery Era — Podcast:

I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it! We just don't like paywalls, and so we've decided to ditch ours. Unfortunately, the media business is still a tough, cut-throat business with tiny margins. It's a never-ending Olympic challenge to stay above water or even perhaps — gasp — grow. So ...
If you like what we do and want to support us, please chip in a bit monthly via PayPal or Patreon to help our team do what we do! Thank you!
Written By

Proponent of solar, wind, EVs, veganism, democracy, and all things environmental and progressive. Writer. Editor. Active options, futures & stock trader. Go green.


You May Also Like

Clean Power

A rate modification for solar customers in North Carolina was recently approved by the North Carolina Utilities Commission (NCUC). This has an impact on...


Hawaii is struggling to convert to renewable energy and has created an innovative residential battery storage sharing program to help make that happen.


In a recent article, we shared the developing story of attacks on net metering policies around the United States, even in solar-friendly states. While...

Clean Power

There is a threat to clean energy that’s proliferating around the United States. In articles like this one, we’ve covered the story of several...

Copyright © 2023 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.