What Is Generation Credit on a PG&E Bill?
Demystify the Generation Credit on your PG&E bill. Understand this important credit, its purpose, and how it affects your monthly energy statement.
A generation credit on a utility bill represents a reduction in electricity charges. For Pacific Gas and Electric (PG&E) customers, this credit reflects energy a customer’s own system, such as rooftop solar panels, has generated and sent back to the electrical grid. It offsets the cost of electricity the utility would otherwise provide. Understanding this line item is important for managing household energy expenses and participating in renewable energy programs.
Understanding Generation Credit
The “Generation Credit” on a PG&E bill applies to customers who produce their own electricity, typically through solar photovoltaic systems. When these systems generate more power than consumed, excess electricity flows back into the electrical grid. This exchange is managed through Net Energy Metering (NEM).
Under NEM, PG&E credits customers for exported electricity, reducing the amount owed for electricity drawn from the grid. This credit targets the “generation” portion of the bill, covering the cost of producing electricity. Delivery charges, which fund transmission and distribution infrastructure, are handled separately and are not typically offset by these credits.
Eligibility requires participation in a NEM program with a grid-connected renewable energy system. Changes in metering policies, such as the transition to NEM 3.0 (also known as the Net Billing Tariff), have altered how the value of exported electricity is calculated. Under NEM 3.0, credits are based on an “avoided cost rate,” which generally results in a lower value for exported power compared to earlier NEM versions.
A “Generation Credit” can also appear when a customer’s electricity generation is provided by a Community Choice Aggregator (CCA) rather than PG&E; in such cases, PG&E credits back the generation charge they would have applied.
Calculating Your Generation Credit
Your generation credit amount depends on the volume of excess electricity your system feeds into the grid and your specific rate plan. PG&E uses a bidirectional meter to measure both the electricity you consume from the grid and the surplus electricity your system exports.
Time-of-Use (TOU) rates play a significant role in valuing exported electricity. Under TOU plans, the cost of electricity varies depending on the time of day and season, reflecting periods of higher or lower demand. Consequently, electricity exported during peak demand hours, when rates are higher, earns a greater credit value than electricity exported during off-peak hours.
Credits accrue over a monthly billing cycle. For NEM customers, these monthly charges and credits are reconciled over an annual “true-up” period, typically 12 months from the system’s interconnection date. At the end of this period, any remaining balance of charges or credits is settled. If a customer’s system produces more electricity than they consume over the entire 12-month period, they may receive Net Surplus Compensation (NSC) for the excess. This compensation is usually paid at a lower, wholesale rate, reflecting market prices for electricity.
Locating Generation Credit on Your Bill
Finding the generation credit on your PG&E bill involves navigating sections detailing electric charges and renewable energy activity. Monthly energy statements summarize year-to-date solar charges and credits, showing progress towards your annual true-up. The credit typically appears under “Electric Charges” or “Net Energy Metering Details,” often listed as “Generation Credit” or similar.
This credit first reduces the generation portion of your bill. If credits exceed generation charges for a billing period, surplus credits usually roll over to offset future electricity consumption within the annual true-up cycle. Even with significant generation credits, customers typically incur minimum monthly delivery charges, which cover grid connection and other essential services. These fixed fees are generally not offset by generation credits.
At the conclusion of the 12-month true-up period, a comprehensive statement reconciles all energy charges and credits for the year. Any outstanding balance must then be paid. Any remaining excess credits are typically reset to zero before the start of the next billing cycle, unless they qualify for Net Surplus Compensation.