Greetings.   

There is a scheme the electric utility companies credit / not pay! for solar generation in dwellings, at 75% of the electric power rate.  That is; if my solar panels on the roof deliver/inject electric energy into the grid which is priced at -say $0.10 per KWh-

If I inject/deliver into the utility electric grid 100KWh @ $0.10/each KWh = $10

What does it mean... The utility company gives me credit of $7.50 but received $2.50 from my neighbors... So the utility company cost of the $7.50 credited to me costs them $2.50 less, being actually $5.00 ?    Am I seeing it wrong ?

I don't know where you get the $5.00. They're giving you $7.50 for generating the power and keeping $2.50 to cover the cost of delivery and maintenance of the infrastructure. Doesn't sound like a particularly bad deal, if this is surplus power you're selling. If you sold eggs or basketware or jam to a wholesaler, your cut of the retail price would probably be less. 

Your neighbors pay the utility $10 for the 100 kWh you generated and the utility delivered. You get $7.50, the utility keeps $2.50.

Thanks. 

The $5.00 would be the credit of $7.50 they give me when I consume back from the utility minus the $2.50 the utility collected from my neighbors that consumed the power I generated earlier.

The thing works as a reservoir.  My generated energy is "stored" by the utility until there is no sunlight and I use again energy from their grid.   But did they already billed my neighbors $2.50 ?   And will credit me for $7.50

Is the utility crediting me $7.50 really costing the utility $7.50 to issue the credit ?

Edited... Am asking just by the financial smell of it.  Something is behind scenes I cannot see.  Suspect it is a similar 'effect' of the one on post     ---> https://www.scienceforums.net/topic/62792-question-in-finances/#comment-649137

 

Edited May 11, 20241 yr by Externet

3 hours ago, Externet said:

  My generated energy is "stored" by the utility until there is no sunlight and I use again energy from their grid.   But did they already billed my neighbors $2.50 ?   And will credit me for $7.50

Look at it piece by piece. You buy hydro from the utility at $10/kw/hr whenever you need it. Your neighbour buys hydro from the same utility at $10/kw/hr whenever he needs it. You sell excess electricity to the utility at $7.50. Your neighbour may or may not sell excess electricity to the utility for $7.50.  All separate transactions.

The utility company has overhead costs for infrastructure, maintenance and repair, vehicles, personnel, administration and billing, taxes etc. So a 75% share for the supplier sound like a good deal. You have very little overhead, once the infrastructure is in place, but you may have to pay income tax on the money you receive from the utility.

But then the charges can get a little whiffy: They may tack onto your bill a 'delivery charge', a surcharge, equipment rental, retirement of their debt or whatever extras. I don't know where you are, but in Ontario, the extras are considerably more than what we pay for the electricity we use. (Our solar array doesn't generate excess; it's just enough for our needs, except in winter and bad weather, when we fall back on the grid.) 

Edited May 11, 20241 yr by Peterkin

18 hours ago, Externet said:

The $5.00 would be the credit of $7.50 they give me when I consume back from the utility minus the $2.50 the utility collected from my neighbors that consumed the power I generated earlier.

This would mean they are selling power to your neighbor at $0.025 per kWh. That doesn’t seem right.