What is Net Metering?

As a homeowner, you have to consider many factors while switching to solar, and one of the most important ones is how you will get the most value and electricity savings out of your solar system. Well, in that case, you might have heard about net metering. 41 states offer net metering programs to homeowners who utilize residential solar to further encourage the widespread adoption of solar energy. Net metering, or net energy metering, is a utility-based program that offers credits to homeowners when their solar panels generate excess electricity during peak sunlight hours. Homeowners send the extra solar energy back to the power grid, for which the utility pays them by reducing their electricity bill by their credit amount.

How Does Net Metering Work?

In most cases, solar panels can generate more electricity than is required during daylight hours. This is beneficial for consumers since they are, as homeowners, billed only for the net energy used each month. Net metering is a great way to get credit for the solar energy you send back to the grid.

When your net metered system sends solar energy to the grid, your electric meter spins backward, and your utility applies credit for the full retail value of electricity to your account. This is a great way to reduce the payback period of your investment in solar panels.

At night or during cloudy days when your PV system isn't generating enough electricity to meet your home's needs, your home will draw electricity from the grid and spin its meter forward. At the end of the month or each billing period, your utility will compare how much electricity was used by your home with how much was sent back to the grid and bill you for the amount of energy you used that wasn’t replaced with solar energy.

The Advantages of Net Metering

Save Money on Utility Bills

The primary benefit of net metering for solar panel owners is the amount of money saved on utility bills. Net metering can often result in savings of thousands of dollars over the course of a solar panel installation's lifetime.

As we noted earlier, a solar panel system can completely offset a customer's energy charges within one billing cycle. However, there are some additional fixed charges included in most electric bills that net metering cannot account for.

Net Metering is Your Virtual Battery

Net metering is a great way to even out your electricity production if you have solar panels. Without it, you would need to store your excess electricity in a solar battery, which can be costly. With net metering, you can send your production to the grid and get credit for it.

You can then use that credit later on when your solar system is not producing enough electricity (on a cloudy day or at night, for example). Plus, since net metering is set every year, you can make up for low solar production during the winter months with the credits you received during the summer months.

Reduce Pressure on Grid

The energy demand is constantly increasing, resulting in a strained and overloaded electricity grid. An unstable grid is prone to blackouts and brownouts, which can damage appliances and leave you powerless for days.

Residential solar installations provide utilities with a huge benefit when it comes to reducing stress on the electricity grid. Since homeowners who have installed solar panels use their own electricity instead of drawing power from their local utility, each residence that goes solar reduces the overall strain on the grid.

Additionally, when a solar power system produces more energy than a homeowner needs, that electricity is sent back to the grid, where it can be used by other non-solar residents to meet their energy demands. This helps even more by taking pressure off of non-renewable power plants.

Environmentally Friendly

If you own a solar panel system and participate in net metering, you can save money by producing your own renewable electricity and selling it back to the utility grid. Your utility company can resell it to other customers without solar panels, who can then benefit from your solar production. Net metering helps the environment by reducing our reliance on non-renewable energy sources. By supplementing the utility grid with solar energy, you can help reduce our carbon footprint, and move towards a sustainable future.

Is Net Metering Mandatory in All States?

Net metering is required by law in 38 states and Washington, D.C. Out of all 50 states, 29 offer full-retail net metering, and 17 have an alternative net metering program or tariff. In addition, some large electric companies in Idaho and Texas have made net metering available to their residential solar customers, even though they are not required to do so.

South Dakota and Tennessee are the only states without net metering or alternative net metering rules.

Hire Solar Gurus to Help You Go Solar Now!

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