Variable vs fixed electricity tariff with solar panels: which fits

You have solar panels but which electricity tariff to sign? Choice can double or halve your savings. Three real 2026 options.

Time-of-Use (TOU)

Most US utilities offer this. Price varies by hour: peak (high), off-peak (low). With solar: surplus sold at peak (summer midday: $0.20-0.40/kWh) lifts bill. Volatility: high.

Wholesale-indexed (real-time)

Some utilities (Texas, NY) offer real-time pricing tied to wholesale market. Similar to TOU but more granular. Spain: PVPC works similarly. Average annual cost equal or slightly less than TOU.

Fixed-rate (locked all year)

Pay fixed $/kWh ($0.15-0.25 typical). Your surplus sold at the same fixed price (5-7 cents). Stability but lose peak-hour advantage. Protection tariff if you don't want surprises.

2025 comparison with solar

Example: 5 kWp with 60% self-consumption + 40% surplus. TOU averaged $0.18/kWh, saved $1500/year. Indexed similar: $1450/year. Fixed $0.20/kWh: $1350/year. TOU won by $150. But in 2022 TOU lost $200 due to volatility.

Net metering vs net billing

Net metering (1:1): your surplus credited at full retail rate. Best for solar owners. Net billing: surplus credited at wholesale rate (much lower). Many states moving from metering to billing (CA NEM 3.0). Critical to know before sizing system.

Which to choose by profile

Conservative, no surprises: fixed rate. Adaptable, shift loads by price: TOU or indexed. Lots of solar surplus (>50%): TOU to sell at peak. Business with night consumption: time-differentiated tariff.

Combine with compensation modality.