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Self-consumption: what you need to know

One concept gaining importance in the world of solar and home storage is self-consumption: producing and consuming your own electricity at your home or business. As net metering policies start to shift in the coming years, a self-consumption setup may be the key to maximizing your solar savings. Find out what solar + storage costs in your area in 2023

Key takeaways

  1. Self-consumption refers to producing and using the same electricity on-site

  2. Self-consumption happens in two ways: sending electricity right to your appliances from solar panels, and storing electricity in a home battery for use later

  3. With net metering policies potentially shifting in coming years, self-consumption is one way to maximize your solar savings

  4. You can get competing solar-plus-storage quotes on the EnergySage Marketplace to make sure your lifetime solar savings are as high as they can be

What is self-consumption?

If you have a solar panel installation, there are a few ways you can take advantage of the electricity it generates: use the energy directly from your panels in real-time, pull solar credits from the grid with net metering, and draw stored solar electricity from a home battery. During the day when your panels are generating electricity and your appliances are running, electricity flows right from the panels to your home’s electrical outlets. With a traditional home solar panel system, if your panels produce more electricity than you need at any given moment, the extra electricity is sent to the grid – and, if your utility company offers net metering, you will get credits for all the exported electricity, which you can use later on. Alternatively, if you have a home battery, you can store any extra energy on-site instead of sending it to the grid. That way, you can draw electricity right from your battery when you need it rather than pulling electricity from the grid.

Importantly, when you send excess electricity to the grid for credits on your bill and use those credits at a later date (in the net metering example), you are not using the actual electricity your solar panels produced. Self-consumption (also known as self-supply) is when you produce electricity and then use those same electrons to power your home and appliances. This can happen in two ways: producing and using immediately (solar panels send electricity directly to your home appliances), or producing and storing for later (solar panels send electricity to a home battery, which you can draw from later).

Why is self-consumption important? How does it help you?

Historically, the vast majority of residential solar energy systems have been connected to the grid and set up on a net metering system. Most utilities offer “one-to-one” net metering, meaning you get full credit for the cost of the electricity you provide to the grid. What does a one-to-one net metering system entail? Here’s an excerpt from our article all about net metering:

How net metering works

Say you install a net metered solar panel system. When your solar panels are producing more electricity than you are using at any point during the day, the electricity is sent back to the grid, running your electric meter in reverse. When you use more electricity than your solar panels are producing, either at night or on cloudy days, you pull electricity back from the grid, running your meter forwards. At the end of the month or year, you are billed the net of what you put onto the grid and what you took off the grid: hence “net metering”.

With a correctly sized solar energy system, you can produce enough electricity to match your home’s electricity use for the entire year. However, the amount of electricity your solar panels produce will vary throughout the year: more in sunnier summer months, and less when the sun is lower in the sky and sets earlier in the winter. Net metering helps you to account for these seasonal differences in solar production by crediting you for the excess electricity your panels produce so that you can use it at a later date.

However, some utility companies are changing the way they offer net metering. Take the proposed net metering 3.0 plan in California as an example – this rate setup could decrease the value of electricity sent back to the grid by almost 75 percent! For utility customers, this means the lifetime return on investment of a solar panel system could take a big hit. One way to mitigate these proposed changes (and other net metering payment structures that pay out at less than one-to-one): self-consumption.

Increase your solar savings with increased self-consumption

How exactly does self-consumption combat changing net metering policies? Consider the amount of electricity it takes to power your refrigerator for a day – about 150 watt-hours. If you generate that electricity on your roof with solar panels and feed it directly to your refrigerator, you pay $0 to your electricity provider. Let’s say that instead, you generate that 150 watt-hours on your roof, send it to the grid, and then pull it back out later to power the refrigerator. If you’re not on a one-to-one net metering rate, you won’t get credited for the full price of the 150 watt-hours. Maybe it’s an 80 percent payout instead; now, you’re credited for 120 watt-hours, and you need to pay for an additional 30 watt-hours to cover the power usage of the refrigerator. All of a sudden, you’re paying your utility company for power that you could have used for free. That’s where the value of self-consumption comes in: use the power you produce, and it won’t lose value.

To go off-grid with solar, self-consumption is essential

If you’re interested in going “off-grid” with solar, or just want to keep the lights on when your power is out, designing for high self-consumption is essential. With solar plus storage and a high degree of self-consumption, going off the grid might actually be a feasible setup for a small home. However, without self-consumption, you’ll run into problems. When you’re off the grid, you can’t send excess generation to the grid for net metering credits, and you definitely can’t pull electricity from the grid when your solar isn’t producing.

How can you increase your own self-consumption?

While self-consumption isn’t necessary for everyone with solar panels on their property, it’s key to maximizing your savings without one-to-one net metering, which exists (or will exist in the future) in many places. There are three major ways to increase your self-consumption: altering your electricity consumption habits, installing a home battery and upgrading your electrical panel to a smart panel.

The solar self-consumption ratio

One way to assess your own self-consumption is to look at your solar self-consumption ratio. This is just the ratio between your solar production and the percentage of that solar production that’s consumed on site. Importantly, a self-consumption ratio of 100 percent doesn’t necessarily mean all of your electricity usage is self-supplied – it only means that you’re using all of the electricity you generate with solar on site. If your solar panel system is only sized to produce 80 percent of your electricity, you can still have a 100 percent self-consumption ratio, but you’ll still need to pull some energy from the grid to cover your entire usage.

#1: Change your electricity consumption habits to increase self-supply

The simplest way to increase your level of self-consumption is to adjust some of your daily habits. For example, because solar panels produce energy mostly during the day when the sun is out, you can make a note to run your dishwasher and laundry machine in the middle of the day to use as much electricity directly from your panels as possible. And at night, when your panels aren’t producing electricity, turning off appliances and lights will reduce the amount of electricity you’ll need to pull from the grid.

#2: Install a home battery to increase self-supply

One important way to increase your own solar self-consumption is to pair your solar panel system with a home battery setup. With a battery, excess electricity produced by your panels during the day is stored on site to be used later. A home battery essentially replaces the grid as a bank for extra solar electricity, and instead of losing out on value of that energy without one-to-one net metering, you can pull electricity from your battery without any loss in value. There are many reasons to get a battery, and increasing self-supply is a reason rising in importance each year.

#3: Upgrade to a smart electrical panel to increase self-supply

Want to go one step further than installing a home battery? Pair it with a smart electric panel like the Span Smart Panel or the Schneider Square D Energy Center. Smart devices like these combine the benefits of energy storage with the benefits of changing your energy usage habits. Perhaps more accurately, they help you automatically change your usage patterns to save energy and rely more on self-consumption using your home battery. With a smart panel, you can time certain appliances and automatically conserve electricity during low solar production times of the day.

Get started on your clean energy journey with EnergySage

Whether you’re interested in self-consumption to maximize your savings or get off the grid completely, the first place to start is comparing solar and energy storage quotes. That’s where EnergySage can help: when you sign up for a free account on the EnergySage Marketplace, we provide you with custom quotes from installers in your area. The best part? You can even include a smart panel in your installation. So what are you waiting for – get started with your own clean energy journey with EnergySage today!


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