What's the Deal with Net Metering?

A concept pioneered in the United States in the early 1980s, net metering is a billing method that credits solar energy system owners for the electricity they add to the grid. It promotes private investment in renewable energy.

How Net Metering Works

With a correctly sized solar system (which your solar provider will take care of designing!), your solar panels can generate electricity equal to the amount of electricity your home or business will use for the whole year. As seasons and weather change, your energy usage and how much your panels generate will vary. Net metering allows you to accumulate credits for the excess electricity your panels produce so you can use it later; in short, the extra power your panels generate covers the times when you don't produce enough. When your solar panels produce more than you need, the unused power goes into your electric utility's grid.

When your solar panels produce more electricity than you use in a month, you will receive credits on your utility bill based on the amount of kW hours you sent back to the grid. You'll use those credits in the evenings and other times that your panels aren't producing as much power. If you produce less electricity than you use in a given month, you will buy electricity from your utility to make up that difference, minus any credits you've accumulated. 

 A net meter is a bidirectional meter that keeps track of the electricity consumed and the energy the solar system generates.


Net Metering Benefits

There are benefits from net metering for the solar system owner as well as the rest of the community.  Here are are few of them.

Customers Can Control Their Power Bills

Net metering allows individuals and families to produce their own clean, low maintenance, efficient power. Since most solar power is produced during the day when there is more production than consumption, net metering allows solar customers to send that power back to the grid until they need it, reducing their future electric bills.

Solar Customers Help Preserve the Electric Grid

Some utilities view net metering as lost revenue. In actuality, net metering policies create a smoother demand curve for electricity, which allows utility companies to manage their peak electricity loads more effectively. Additionally, net metering encourages power generation near where it will be consumed, diminishing strain on existing distribution systems and preventing long-distance electricity transmission losses.

Net Metering Users Use and Pay for the Grid

Crossborder Energy studies show that less than half of an average solar energy system's production goes into the grid. Many solar customers have less than a full offset of their power usage, so they continue to use energy from the utility, for which they pay full retail price. Net metering users also pay a monthly connection fee to be able to access the grid.

Non-Solar Customers Also Benefit

The benefits of residential rooftop solar and net metering equal or exceed the costs to the utility and non-solar customers. California, Maine and Nevada have done cost-benefit studies that demonstrate non-solar customers benefit from net metering. There are also benefits to communities and society at large from net metering: improved electric system reliability and resiliency, bettered air quality, and a positive local economic impact. 

With current solar technology, net metering is the best option for most residential and commercial solar owners. Make the switch to solar today.