Understanding Your Electric Bill

Electric Bill

All of the information highlighted on this sample bill is required for a solar energy quote.

  • 1 - Annual Usage (kWh): Sum of past 12 months' kWh usage
  • 2 - Month’s Electric Cost: Total billed (incl. taxes, fees and charges)
  • 3 - Month’s Usage (kWh): Amount of kWh used during the billing period.
  • 4 - Monthly Customer Flat Fee
  • 5 - Distribution / Demand (kW): Peak kW reached during the month
  • 6 - Distribution / Demand Charge: Total amount charged for the demand


Q: What if my bill does not have the past 12 months’ kWh usage?
A: You should be able to retrieve this information by accessing your utility account online or by calling the utility company and requesting it.

Q: My bill has the past 12 months of kWh usage, but does not give me the Annual kWh use?
A: Simply add the past 12 months together and use the sum for your Annual kWh use.

Q: What if I have a Demand or Distribution Rate Structure?
A: Check the box for "Do you have a Demand Rate Structure?"

Q: What if I have more than one Demand Charge?
A: Simply add the demand charges together and input the sum for Demand Charge /$. If there are different kW figures for Demand, just input the largest kW demand figure. *Do not add the kW figures together, only the dollar amounts charged.

Q: What is a Demand / Distribution Charge?
A: A demand / distribution charge is a typical fee charged by a utility to its commercial and industrial customers. This charge is designed to ensure the utility company has enough capacity on reserve to power your peak kW demand use at any given time. The charge is typically based on the highest or peak kW reached within 15 or 30 minute intervals during the entire billing cycle. There is a cost per kW rate imposed and multiplied by the peak kW power. Some utilities also implement additional criteria such as seasonal rate changes, time of use (TOU) rate changes and even Ratchet rate structures.

Q: What is the difference between Kilowatt Hour (kWh) and Kilowatts (kW)?
A: A Kilowatt Hour (kWh) is a measurement of Energy (kW x Hours=kWh) and is the primary measurement used by the utility to determine your usage each month. Unlike power, energy does not change quickly, but instead accumulates gradually.
A: A Kilowatt (kW) is a unit of Power and is the primary measurement used by the utility to determine your peak demand each month. This can change quickly, depending on your business and the types of loads you are operating.

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