What is net metering?
Net metering (also known as net energy metering) is a solar incentive that allows you to store extra solar energy on the electric grid.
Normally, solar panels only produce electricity when they’re in the sun – meaning that unless you have a whole lot of batteries, your solar power will turn off when it’s cloudy or at night. Net metering, on the other hand, allows you to store your excess power temporarily, on the grid, for use when your cells aren’t producing energy.
The system doesn’t just work from one day to the next – net metering keeps a tab of your excess energy production and allows you to pull from it throughout the month or year, helping to account for these differences in solar electricity production that you’ll see in different seasons. The idea is that with the right size solar energy system, net metering can effectively help you to cover your home’s electricity use year round with solar, without having to purchase a whole lot of costly batteries.
How net metering works
Solar energy systems typically hit peak electricity production in the afternoon, when many people aren’t home using electricity. By contrast, home electricity use is typically higher in the mornings and evenings. Net metering helps you to account for these ups and downs in your day-to-day electricity production and usage by taking the extra energy into storage and releasing it to you later.
With net metering, excess electricity is fed into your electric utility’s grid when your system is producing more than you need. When this happens, your meter actually runs in reverse. When your system isn’t producing enough electricity, you can draw it from your utility just as you did before you went solar. This “back-and-forth” between your system and the grid ensures that your excess production will still be used and your shortages will be met. It also allows you to store much more power – and for longer periods of time – than you would be able to if you tried to build an in-house storage system.
Save by going solar
For most homeowners, the result of net metering is a savings of tens of thousands of dollars on electricity costs over the lifetime of your solar energy system.
Net metering credits homeowners for the energy that their solar panels generate at the same rate that they would otherwise pay for energy.
This means that when your solar power system generates more electricity than you use over the course of a month, your utility bill will receive a credit based on the net number of kilowatt-hours you gave back to the grid (if you were hoping for a monthly check, see below.)
If you produce less electricity than you use in a given month, you’ll simply be asked to pay the difference, unless you have a net metering account that works throughout the year.
“Net metering can give you a new monthly paycheck” – Fact or Fiction?
With net metering, you can receive utility bill credits for the electricity that your solar panels produce. However, you won’t receive a cash payment from your utility for your excess solar electricity, no matter how much you generate. If you do generate more electricity than you use in a year, utilities in some states will let you carry credits over into future years, while others will reduce your credits.
In general, most homes will produce excess electricity in the summer months and will use more electricity from the 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.
What about going off the grid?
In essence, net metering is like having the grid serve as a giant solar battery. If you install an energy storage system to take your home “off the grid,” you won’t have access to the benefits of net metering. In most cases, staying connected to the electric grid is your best option – batteries are surprisingly expensive, and while home solar battery systems can account for hour-by-hour variations in solar electricity generation, they simply aren’t large enough to provide the seasonal “smoothing” benefits of net metering.