Quick answer
Utility An electric utility is the organisation that delivers electricity to your home and bills you for it. In the US it is one of three types: an investor-owned company, a member-owned cooperative, or a publicly owned utility run by a city or state agency.
The type matters for solar because it decides who sets your rates and your export credit: a state commission, a co-op board or a city council.
Quick facts
The key facts about utility, with sources:
- Three main types
- Investor-owned (IOU), cooperative, publicly owned 1
- Number of US utilities, 2017
- Almost 3,000 distribution utilities 1
- Share of US customers on IOUs
- About 72% (EIA, 2017 data) 1
- Count, 2017
- 168 IOUs · 812 co-ops · 1,958 publicly owned 1
- US average residential price, 2025
- 17.30¢ per kWh 2
- Where to find yours
- The name at the top of your electric bill
- Why it matters for solar
- Sets your rate schedule, export credit and interconnection rules
Key takeaways
- Your utility is whoever owns the wires to your home and sends the bill.
- There are three types: investor-owned, co-op and publicly owned.
- Each type answers to a different body: a state commission, a member board or a city.
- Your utility sets the export credit, which often decides solar savings more than the panels.
- Neighbors on different utilities can get very different solar deals.
What a utility does
A utility runs the last part of the grid: the local lines, transformers and meter at your home. It reads the meter, sends the bill and fixes outages on its lines. Many also own power plants or buy power for you.
The EIA counted almost 3,000 of these distribution utilities in the US in 2017. That number reflects history. In the 1930s, only about 10% of rural US homes had electricity, so farmers formed co-ops to bring lines to themselves. Cities built their own systems even earlier.
The three kinds of utility
| Type | Owned by | Rates usually set by | Typical size |
|---|---|---|---|
| Investor-owned (IOU) | Shareholders | The state utility commission, after a public rate case | 168 utilities, about 654,600 customers each on average 1 |
| Cooperative (co-op, EMC) | The members it serves; not-for-profit | Its elected board; some states add commission oversight | 812 co-ops in 47 states, about 24,500 customers each 1 |
| Publicly owned (municipal, state agency) | A city, county, district or state | City council, utility commission or agency board | 1,958 utilities, about 12,100 customers each 1 |
How a utility fits into your solar project
- Your installer → files an interconnection application with the utility
- Utility → reviews the design and may study the local line
- Inspection passes → utility sets or programs a two-way meter
- Utility → grants permission to operate
- Every month → the utility bills your imports and credits your exports under its tariff
Why your utility type changes the solar math
Solar savings come from two numbers on the utility’s tariff: the price of each kilowatt-hour you no longer buy, and the credit for each one you send back. Both are set by whoever governs the utility.
State net metering laws often apply to investor-owned utilities first, with separate or lighter rules for co-ops and municipal systems.
Virginia, for example, has one net metering statute for investor-owned utilities and another for cooperatives, with different size limits 4.
A neighbor across a county line can face a different export credit and a different monthly fixed charge for the same panels.
Interconnection also runs through the utility: it reviews the application, may inspect the system and issues permission to operate.
Example: the same 100 kWh of exports on three SC utilities
This uses the verified net-excess credits below and a made-up 100 kWh of net excess. It ignores fixed charges, netting rules and time-of-use periods, which also differ.
| Utility (type) | Net-excess credit | 100 kWh earns |
|---|---|---|
| Duke Energy Carolinas (investor-owned) | $0.0419/kWh 9 | $4.19 |
| Santee Cooper (state-owned) | $0.0415/kWh 8 | $4.15 |
| Berkeley Electric (co-op) | $0.0603/kWh 10 | $6.03 |
Small per-kWh gaps add up over 25 years. Most savings come from power you use yourself, which offsets the full retail rate, so check both numbers. Our savings calculator runs the full math.
Where you see your utility’s rules
Your bill names your rate schedule, such as "Residential Service". The utility website posts the full tariff as a PDF. Solar rules sit in a rider, a short add-on to the tariff. The interconnection form lists size limits and fees.
If you are buying a home, ask the seller for a recent bill. Two houses on the same road can be served by different utilities. Our guide to buying a house with solar covers the rest.
Strengths and drawbacks of each type for solar owners
Possible strengths
- Investor-owned: rules are set in public cases you can read and comment on.
- Co-op: members elect the board and can push for solar policies.
- Municipal: local control, and rates sometimes below nearby IOUs.
- All: the grid gives you power at night and takes your surplus.
Possible drawbacks
- Investor-owned: rate cases can raise fixed charges for everyone.
- Co-op: smaller staff can mean slower or tighter solar programs.
- Municipal: solar credits can be set by a supplier and changed, as with Rock Hill’s PMPA rates 12.
- All: export credits are often below the retail rate.
What your utility can limit
Utilities can cap system size, charge application fees, require minimum bills and pay low export credits. Some also cap how many customers can join a program. In SC, Duke Energy Carolinas, Berkeley Electric and others cap residential systems at 20 kW AC.
Rules change. Programs can close to new customers, and new tariffs can apply to new applicants only. Ask how long your terms are locked. Our guide to what happens if net metering ends explains the risk.
How your utility shapes solar cost and payback
The utility does not set what solar costs to install. It sets what solar saves. The EIA says the US average residential price was 17.30¢ per kWh in 2025, ranging from about 8.20¢ in North Dakota to 35.72¢ in Hawaii. A higher rate means each kWh of solar is worth more.
Application fees, meter fees and minimum bills add to the cost. Santee Cooper, for example, lists a $100 application fee under DG-25 8. Compare these when you work out payback with our solar cost guide.
Sources: [2]
What to look up for your utility before buying solar
- Your residential rate schedule: the energy charge per kWh, the fixed monthly charge, and any time-of-use periods.
- Its solar or net metering rider: how exports are credited and when unused credit expires or is paid out.
- System size limits and application fees on the interconnection form.
- Any minimum bill or charge that solar cannot offset.
- How long the utility usually takes to approve and grant permission to operate.
Keeping track after you go solar
Read the bill each month. Check imports, exports and any banked credit. Compare with your monitoring app. If production looks fine but credits look wrong, call the utility’s billing team.
Watch for rate-case notices. They come with your bill or by email and can change fixed charges or export credits. Our guide to the first bill after solar shows what each line means.
Warning signs and who to call
Call the utility if:
- Your bill shows no export credit months after permission to operate.
- The meter was not swapped or reprogrammed after approval.
- Credits vanish at the end of a period without explanation.
- A salesperson says the utility "requires" you to buy solar. Utilities do not.
Rule of thumb
Before signing a solar contract, read your utility’s current solar rider yourself. A quote is only as good as the export credit it assumes.
Who regulates each type
Investor-owned utilities answer to the state utility commission, which approves rates in public cases. In South Carolina that is the Public Service Commission; Duke Energy Carolinas’ residential rate, for example, was set in Docket No. 2025-172-E.
Co-ops are run by member-elected boards. Whether the state commission also reviews them varies by state.
Public utilities answer to a city council, board or state agency. Santee Cooper’s rates are set by its own board, not the PSC.
The EIA notes some states regulate the full price, while others let generation prices float and regulate only the wires.
Utility vs related terms
| Term | Meaning | Glossary |
|---|---|---|
| Utility | The company or agency that serves and bills you | This page |
| Electric grid | The physical network of plants and lines | Electric grid |
| Retail energy supplier | In some states, a separate company that sells the energy while the utility delivers it | — |
| Export compensation | How the utility pays for power you send back | Export compensation |
Misconceptions
- Myth All utilities must offer net metering.
- Reality Rules vary by state and utility type. Many now pay less than retail for exports.
- Myth I can switch utilities if I do not like the solar rules.
- Reality The wires utility at your address is fixed. Some states allow a separate energy supplier, but the wires utility still handles solar.
- Myth Co-ops are always better for solar.
- Reality Neither type is better by default. Compare the actual tariffs.
- Myth Solar ends my relationship with the utility.
- Reality Grid-tied homes still buy power at night and pay fixed charges.
South Carolina examples of each type
South Carolina has all three. Investor-owned: Dominion Energy South Carolina and Duke Energy Carolinas, both regulated by the Public Service Commission.
State-owned: Santee Cooper, whose rates are set by its own board, not the commission 7. Cooperatives: Berkeley Electric and Palmetto Electric, each with its own solar credit.
Municipal: Greer CPW and the City of Rock Hill. The net-excess credit differs by utility: Duke Energy Carolinas pays $0.0419 per kWh under Rider RSC 9, Berkeley Electric $0.0603 under its Renewable Surplus Rider 10, and Greer CPW 6.54¢ on-peak and 4.251¢ off-peak 11.
Georgia and Virginia
In Virginia, Dominion Energy Virginia and Appalachian Power are investor-owned and follow Va. Code §56-594; cooperatives follow §56-594.01, which allows residential systems up to 20 kW 4 5.
The SCC approved Dominion’s NEM 2.0, which credits annual net excess at $0.05829/kWh and adds a $1.00 monthly administrative charge, for new non-low-income interconnections from about 1 May 2027 6.
In Georgia, Georgia Power is the investor-owned utility and many homes are served by electric membership corporations (EMCs); check your own utility’s current solar terms.
What to do with this
Use your utility’s rules to decide:
- Size: stay within the cap, and near your own use if exports pay little.
- Battery: add one if exports pay far below retail or outages are common.
- Rate plan: ask whether a time-of-use plan suits solar better.
- Timing: apply before a known rule change if the current terms are better.
Related guides and tools
Questions about utility
How do I find out which utility serves my house?
Your electric bill names it. If you are buying a home, ask the seller for a recent bill or check the utility’s service territory map. Two houses on one road can be served by different utilities, so do not assume.
Can I choose my electric utility?
Usually not for delivery. The utility that owns the wires at your address delivers your power. A few states let customers pick a separate energy supplier, but the wires utility still handles solar interconnection and the meter.
Is a co-op better for solar than an investor-owned utility?
Neither is better by type. Compare the actual export credit, fixed charges and size limits on each tariff. In South Carolina, Berkeley Electric’s co-op credit is above Duke Energy Carolinas’ net-excess credit, but other co-ops pay less.
Who regulates an electric cooperative?
Its member-elected board sets most rates. Whether a state commission also reviews them varies by state, so check your co-op’s bylaws and your state commission. As a member, you can vote in board elections.
What is an investor-owned utility?
It is a private company owned by shareholders that serves customers in a set territory. A state commission approves its rates. The EIA says IOUs served about 72% of US customers in 2017, though they were only 168 of almost 3,000 utilities.
What is a municipal utility?
It is a utility owned by a city or town. The city council or a local board sets its rates. In South Carolina, Greer CPW and the City of Rock Hill are examples. Their solar credits are set locally.
Does my utility have to let me install solar?
In most cases you can install it, but the utility must approve the grid connection. It reviews your application, may require upgrades and grants permission to operate. South Carolina’s Act 62 requires that self-use be allowed without penalty.
Why does my utility charge a fee even with solar?
Fixed monthly charges pay for meters, billing and lines. Most solar credits cannot offset them. Dominion Energy South Carolina, for example, says credits never offset its basic facilities charge.
What is an EMC in Georgia?
EMC stands for electric membership corporation. It is Georgia’s name for an electric cooperative: a not-for-profit utility owned by its members. Each EMC sets its own solar terms, so check yours directly.
Sources
- US EIA, Today in Energy: Investor-owned utilities served 72% of US electricity customers in 2017, retrieved .
- US EIA, Electricity explained: Prices and factors affecting prices, retrieved .
- US EIA, Electricity explained: How electricity is delivered to consumers, retrieved .
- Code of Virginia §56-594, Net energy metering provisions, retrieved .
- Code of Virginia §56-594.01, Net energy metering provisions for electric cooperatives, retrieved .
- Virginia SCC, Order on Clarification, Case PUR-2025-00079 (20 May 2026), retrieved .
- Santee Cooper, 2025 rate study: solar, retrieved .
- Santee Cooper, Distributed Generation Rider DG-25, retrieved .
- Duke Energy Carolinas (SC), Rider RSC Residential Solar Choice (effective 1 January 2026), retrieved .
- Berkeley Electric Cooperative, renewable energy (Renewable Surplus Rider), retrieved .
- Greer CPW, Residential Renewables rate code 750 (Feb 2026), retrieved .
- City of Rock Hill, Tri-Party net billing agreement with PMPA (rev. 17 Sep 2020; read via Internet Archive), retrieved .
Expert review
Written by the HyreSolar Research team. Not yet reviewed by an outside expert. We say so rather than imply a review that has not happened; see our editorial policy.
How the numbers were checked: Utility counts, history and averages are EIA’s 2017 figures; prices are from EIA Electricity Explained (2025).
Virginia rules are from the Code of Virginia sections and SCC order recorded as verified in the HyreSolar Virginia fact pack. South Carolina utility facts come from sc-local/facts.js (retrieved 5 October 2026). The export example multiplies verified credits by a made-up kWh figure.
Suggest a correction. We fix errors and say what changed.