How Does an Electricity Bill Work

How Does an Electricity Bill Work? 

Understanding your electricity bill is the first step toward reducing costs and effectively managing your energy usage¹. Whether running everyday appliances or air conditioning, every kilowatt-hour (kWh) counts in your expenses.  

Many find these bills complicated due to unfamiliar terms and charges. By understanding each component, you can identify cost-saving measures, better manage your energy, and evaluate solutions to help mitigate rising costs. 

How Do I Get My Utility Bill 

Sign into your online utility account. Look for sections labeled “Account,” “Billing,” or “Payments.” From there, you can usually view your most recent bill or select a specific billing period⁶. Most utilities provide an option to view or download the bill, typically as a PDF. Many utilities also offer detailed energy usage data, often broken down into 15-minute intervals, giving you a granular view of your consumption habits.

Common Billing Terminology³

You'll often see these terms on your electricity statement. Understanding them helps you spot discrepancies or evaluate potential savings. 

Example Bill Breakdown

Below is a sample monthly bill for a California household using 600 kWh on a Time-of-Use (TOU) rate plan. Note that delivery charges in this example account for over half the total bill, reflecting the rising grid infrastructure costs across California.

How Your Energy Usage Is Measured

Electricity is measured in kilowatt-hours (kWh). One kWh represents the amount of electricity a 1,000-watt device (like a space heater) uses when running for one hour. Most utilities today have smart meters that track how many kWh you import from or export to the grid in 15-minute intervals, giving you a picture of your usage patterns⁵.

To understand your own energy profile, examine how your kWh usage varies throughout the day and across seasons. The bigger the swings, the greater the opportunity to save by pairing solar with a battery – storing excess energy when production is high and using it when demand or rates peak.

Take Control of Your Energy Costs

Understanding your electricity bill is the first step to managing usage and cutting cost. By tracking when and how you use energy, you can shift consumption away from expensive peak hours and identify opportunities to be more efficient.

Installing solar panels can significantly reduce your utility bill⁷. When the sun shines, your home draws power directly from your solar system, decreasing your reliance on the grid. Your home backup battery also charges up from the sun. At night, the batteries stored energy or the grid provides what you need. Over time, this shift can lead to substantial savings.

Tesla’s energy systems – Powerwall, solar panels and Solar Roof – help you generate and store your own power, reduce reliance on the grid, and take control of your long-term energy costs. Speak with a Tesla advisor to explore how solar and storage can help reduce your electricity bill.