If AES Indiana serves your home and you are comparing solar proposals, one number sits underneath every savings estimate you will be shown: the credit AES Indiana gives you for each kilowatt-hour your system sends back to the grid. That number is not negotiated by the installer and it is not fixed for the life of the system. It is set by a formula in a utility tariff, and it changes once a year.
This page explains where that rate comes from, what it is in the tariff currently in force, why you may find a different figure elsewhere, and what to check on a quote before you rely on it.
The short answer
New AES Indiana solar customers are credited under Standard Contract Rider No. 16, Excess Distributed Generation (EDG). The Rider 16 tariff sheet effective July 27, 2026, issued under IURC Cause No. 46258, lists the Excess DG rate as 5.4325 cents per kWh recorded on meter Channel 2. The same sheet says the company “will update this rate annually by compliance filing with the Commission on or before March 1.”
That is the credit for energy you export. Energy you pull from the grid is still billed at your regular rate schedule. The gap between those two numbers is the reason system sizing matters so much under EDG, which we cover in our overview of Indiana net metering and EDG.
How the rate is calculated
The formula is written into state law and repeated in the tariff. Rider 16 defines the Excess DG rate as “the average marginal price of energy paid by the Company during the most recent calendar year, multiplied by one and twenty-five hundredths (1.25), in accordance with IC 8-1-40-17.” The underlying statute is Indiana Code chapter 8-1-40, which you can read on the Indiana General Assembly’s code site (Title 8, Article 1, Chapter 40).
Three practical consequences follow from that wording:
- It looks backward. The rate is built from what AES Indiana paid for energy in the previous calendar year, not from what retail customers pay today.
- It is tied to wholesale prices, plus a markup. The 1.25 multiplier is applied to a marginal energy price, which is why EDG credits sit well below a typical retail electricity rate.
- It moves every year. When wholesale energy prices rise or fall, the next annual filing follows them. A long-range savings projection that holds today’s credit flat is making an assumption, not stating a fact.
The Indiana Utility Regulatory Commission approved AES Indiana’s first EDG rate in its January 2022 order in Cause No. 45504. That order approved the rate “in accordance with Ind. Code §§ 8-1-40-16 and -17” and directed the company to “annually update its approved EDG rate via a compliance filing by March 1 under this Cause based on updated LMP data for the prior calendar year.”
Why you may see 3.935 cents quoted instead
Search for the AES Indiana EDG rate and you will find more than one figure. That is not a contradiction so much as a timing problem.
The earlier Rider 16 sheet, dated effective May 9, 2024, listed the Excess DG rate at 3.9350 cents per kWh. When we checked on October 2, 2026, AES Indiana’s own Solar FAQs page still described the credit as “currently set at 3.935 cents per kWh,” while the current tariff sheet published on the company’s contract riders page shows 5.4325 cents.
When two official pages disagree, the tariff sheet is the document the bill is calculated from. It is also the one that carries an effective date. If a proposal you received uses a different figure, ask the installer which tariff sheet it came from and on what date.
What “Channel 2” means on your meter
Under Rider 16, AES Indiana installs metering that records two separate quantities. The tariff defines them this way:
- Net inflow (Channel 1): energy supplied by AES Indiana to you. This is billed under your normal rate schedule.
- Net outflow (Channel 2): energy your system produces in excess of what the house is using at that moment, which flows back to the grid. The tariff states plainly that “net outflow is Excess Distributed Generation.”
For each billing month, the outflow kWh is multiplied by the Excess DG rate to produce the Rider EDG credit. Purely as an illustration of the arithmetic, 100 kWh recorded on Channel 2 at 5.4325 cents would produce a credit of about $5.43. Your actual outflow depends on your system, your roof and, above all, how much of your own production you use as it is generated.
That last point is the one that changes design decisions. Every kWh you consume at the moment it is produced offsets energy you would otherwise buy at retail. Every kWh you export is credited at the EDG rate. Our walkthrough of what to watch in your first year of solar monitoring shows how to compare your own production and consumption data once a system is running.
How the credit is applied and carried forward
The current Rider 16 sheet sets out the billing order:
- You are always billed at least the Minimum Charge per Month for your service.
- The EDG credit is applied against usage charges until the bill reaches that Minimum Charge or the credit runs out.
- Any credit left over is carried forward to later bills, and the tariff says the balance “shall be carried forward indefinitely so long as Customer elects to participate in this Rider and receives retail electric service from Company at the premises.”
- When you stop being the customer at that address, unused credits are not paid out to you. They “shall be flowed through the FAC to the benefit of all Customers,” and balances “are not transferable to another account or service.”
If you are likely to move within a few years, that last rule is worth knowing before you size a system to build up a large credit balance.
Eligibility conditions in the rider
Rider 16 lists the conditions a system must meet, citing IC 8-1-40-3. Among them: the generator’s nameplate capacity must be the lesser of one megawatt or your average annual consumption on the premises; it must be owned and operated by you and located on your premises; and it must be “intended and sized primarily to offset all or part of Customer’s own electrical load requirements.” The rider also requires an executed interconnection agreement, compliance with IEEE 1547 and the Indiana Electrical Code, and proof of liability insurance submitted with the interconnection application, as provided in 170 IAC 4-4.3-10.
Note the ownership condition. If a proposal is structured as something other than a system you own, ask the provider how it is treated under this rider before you sign.
Questions to ask about the EDG rate in a quote
- Which EDG rate did you use for exported energy, and which AES Indiana tariff sheet and effective date is it from?
- Does the savings projection hold the EDG rate flat for the life of the system, or model it changing?
- What share of my production do you expect to be exported rather than used in the house, and how did you estimate it?
- How would a battery or a change in when I run large appliances affect that share?
- What happens to any credit balance if I sell the house?
Our longer list of questions to ask a solar installer in Indiana covers equipment, warranties and contract terms.
Common questions
What is the AES Indiana EDG rate right now?
The Rider 16 sheet effective July 27, 2026 lists 5.4325 cents per kWh of excess generation recorded on Channel 2. Because the rate is updated each year by a filing due on or before March 1, check the current sheet on AES Indiana’s contract riders page before relying on any figure, including this one.
Does AES Indiana still offer net metering?
Rider 16 states that eligible customers may enroll beginning July 1, 2022, and that a generator under it “shall not be a net metering facility operating under Rider 9.” Systems that were already on net metering under the earlier rules are a separate case; if you are buying a home with existing panels, ask which rider the system is enrolled in.
Is the EDG credit paid out in cash?
No. Under the tariff it is a bill credit. Excess credit carries forward to later bills while you remain the customer at the premises, and unused credit is not transferred or refunded when service there ends.
Why is the EDG credit lower than what I pay for electricity?
Because the statute ties it to the utility’s average marginal energy price from the prior year, multiplied by 1.25, rather than to the full retail rate, which also covers delivery and other costs. That is why using your own solar production on site generally carries more value than exporting it.
Where this fits
The EDG rate is one input, not the whole decision. It sits alongside your roof, your usage pattern and the installed price, which is where our page on what solar costs Indiana homeowners picks up.
When you want to see which participating providers cover your address, you can see what options are available for your home. Matching depends on service area, availability varies, and you decide whether to move forward from there.
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