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Tax on electricity

In order to pay for various incentives and programs there are different taxes on electricity. These taxes will appear on your electricity bill each month, and they will charge you depending on your electricity usage.

Sales tax

The sales tax is a tax paid to the state. It applies not only to electricity, but to the sales of any goods and services.

Renewable energy surcharges

Most states with deregulated energy markets have renewable energy and energy efficiency programs. In order to pay for these programs, electricity customers are charged an extra percentage of their electricity bill. The charge paid in the electricity bill will go to funding renewable programs, such as price reductions for building solar panels on the roof of your home, or feed-in tariffs (guarantee that the utility will buy your solar electricity at a higher price than the market value), as well as funding Research & Development for renewable energy or energy efficiency.

Revenue based charges

The utility companies and electricity suppliers are themselves taxed on the sales of electricity to customers. Many local municipalities impose taxes on the utility company's revenue. To pay for this tax, they charge the customer. These costs are recovered through a tariff surcharge and may vary depending on the municipality.

Other state surcharges

Other surcharges can include charges to incentivize education and outreach, energy assistance for people with low-income, with medical problems, or assistance for elderly people.