What is net metering?

What is Net Metering?

If you have looked into solar power for your home, you have probably heard the term "net metering". Net metering is a program offered by utility companies where they store and sometimes buy back the extra energy that your solar system produces. The energy your system produces is measured by your "net meter" that uses the electric grid to store excess energy produced by your solar panel system.  With net metering, energy your solar panels produce and you don’t use is credited back to you on future electric bills and stored with the utility in return for credits. At night or during cloudy or rainy days when your solar system isn't producing as much energy and you need energy from the grid, you will be able to use the energy credits before being charged by the utility for using their energy.

How does net metering work?

Let's say you install a solar panel system and your utility company offers net metering. When your solar panels are producing more electricity than you are using at any point during the day, the extra electricity is sent back to the grid, running your electric meter in reverse like a backwards clock. When you use more electricity than your solar panels are producing, either at night or on cloudy days, you pull electricity back from the grid, running your meter forwards. At the end of the month, you are billed the net of what you put onto the grid and what you took off the grid: hence “net metering”. With some utility companies, at the end of the month or year, if you have more credits left over than what you've used, the utility will pay you for those credits. Check with your local utility and read about their net metering policies to find out how it works in your area.

With a correctly sized solar energy system, you can produce enough electricity to match your home’s electricity use for the entire year. However, the amount of electricity your solar panels produce will vary throughout the year, as will your energy usage: more in sunnier summer months, and less when the sun is lower in the sky and sets earlier in the winter. Net metering helps you to account for these seasonal differences in solar production and energy usage by crediting you for the excess electricity your panels produce so that you can use it at a later date when you need it.

How do electric bills work with net metering and what will my electric bill look like after I go solar?

In most cases, homes will produce excess electricity in the summer months and will use more electricity from the utility grid in the winter. Because these variations in production are fairly predictable, your utility won’t send you a monthly check when you produce more than you need. Instead, you will build up extra credits during the summer months so that you can draw from them at night and during the winter months when you need them. With the right solar system, you can be confident that you will generate enough power to match your total electricity use for a year.

When your solar power system generates more electricity than you use in any given month, you will receive a credit based on the net number of kilowatt-hours you gave back to the grid that month. If you produce less electricity than you use in a given month, you must buy electricity from your utility to make up the difference. In these instances, you would pay for the electricity you use, minus any excess electricity your solar panels generated. With some utility companies, they will pay you for that extra energy your solar system produces. Most of the time when utilities are buying back energy, they credit it to your electric account once or twice per year. For more information on how net metering works and how you can save money with solar, contact Empowered Solutions for a free consultation to see if solar power is a good fit for your home.