• Adam H. Cooke

What is Net Metering? I

Net metering (also known as net energy metering) is a utility rate program in which your electric company must purchase excess solar energy that your solar panels produce at full-retail electricity rates.

If your solar energy system produces more power than your home uses, it sends the excess to the grid. Your utility then pays you for the extra electricity. Rooftop solar panels are a great way for you to save money. The best places to install solar panels are not the ones with the greatest amount of sunshine. It's the ones that have the best net-metering policies.

Let's have a closer look at net metering and how it can help you get more money in your pocket.

What is Net Metering?

Net metering is a credit system that allows you to return solar electricity to the grid. It also offsets the electricity you use from the utility in future. This gives you the economic value of the solar energy you produce. You can eliminate any monthly electricity costs if your solar system has been properly sized.

The middle of the day, when the sun shines, is when solar panels produce the most electricity. Problem is, the middle of the afternoon happens to be the time you use the most electricity. Your panels are producing way more electricity that your home actually needs.

The excess electricity generated by solar panels is sent to the grid when it produces more electricity than the home uses. Net metering is used to manage excess generation. Your utility will credit your account for the full retail price of solar energy when a net-metered system sends it to the grid.

At night, when the solar panels stop producing electricity, you pull power from the grid and spin your electric meter backwards. The utility then calculates the difference between how much electricity you have sent to the grid and how much you used in determining your final bill at the end of each billing period. This is net metering.

Will White, a solar expert, discusses net-metering in this video.

Are Net Metering Credits Transferable from Month to Month?

It all depends on the utility. However, most full-retail net billing programs allow energy credits for transfer from month to month. If you produce more electricity than you use in a given month, excess net metering credits may be used to offset the electricity taken from the grid for the following month.

You'll usually have more credits during the summer months when the days are longer and sunnier. These summer credits can be used to reduce your electric bill in the winter.

The true-up policy of your utility, which is how often they buy credits out, will determine whether credits can be carried over month to month. This policy can be found within their net metering policy.

What are the Advantages of Net Metering

Utility bill savings