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Net metering – what it is and how it benefits homeowners

Of the many reasons that the cost of solar power is decreasing for homeowners and businesses alike, net metering stands as one of the most important. Each state has its own net metering policies and depending on how strict or lax they are, these policies can be the difference between making solar affordable or prohibitively expensive for consumers. 43 states have adopted net metering policies, giving many homeowners all over the United States a chance to take advantage of the benefits of net metering.

What is net metering?
Net metering is a very simple and intuitive concept, yet its implications are far-reaching. The Solar Energy Industries Association (SEIA) defines it as "a billing mechanism that credits solar energy system owners for the electricity they add to the grid."

An example of this is a typical residential PV system: during the daylight hours when the system is producing energy, the homeowner's meter runs backward, signifying on-site electricity generation. During the hours when the system is not generating electricity, namely at night, the meter runs forward as the home is using electricity supplied by the grid. At the end of the billing period, the homeowner is only billed for their "net" use – the difference between what they used from the grid and what they produced through their rooftop PV system. 

So what does net metering mean for consumers? Here are three common benefits.

Increased control over energy bills
During the day, homeowners with rooftop solar PV systems tend to generate more electricity than they consume. For homes connected to the grid, the excess energy produced by the home is sent into the grid, where it is stored. Additionally, homeowners can produce an abundance of electricity in the spring and summer months, and use the extra power in the winter when their systems don't produce as much.

Essentially, the energy that is stored when a rooftop PV system sends electricity into the grid during times of high production is later returned to the home during lean times at no cost to the homeowner. After all, the electricity was generated there in the first place.

Less strain on the grid
During peak demand times, the electricity being consumed by homes can put a massive strain on the grid. Bloomberg Businessweek reported that the once world-class electrical grid boasted by the United States is crumbling and in dire need of updating. Maintenance and upkeep costs of this outdated grid are often put on the consumers.

Net metering allows grid connected homes to produce their own electricity and send excess power to the utility company. Rather than generating electricity using coal or other non-renewable sources of energy, utility companies can simply send back the already stored power generated by the homeowners, putting less strain on the distribution systems.

Not only are homeowners with solar PV systems saving money, but their neighbors without them can also see their utility bills reduced. Lower grid usage means lower maintenance costs.

Environmental benefits
Beyond the cost savings, the environmental benefits for everyone cannot be understated. Because net metering allows grid connected homes to use the power they generate during peak production in down times, fewer non-renewable resources have to be used in the generation of electricity. Naturally, this helps to halt our use of unclean sources of energy and protects our environment.

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