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Solar incentives 101: Net metering

Net metering is one of the many programs being implemented across the country to bolster the adoption of solar power and clean energy. While options such as incentives and rebates provide lump sums of savings simply for installing and using solar power, net metering offers a way to save, and even earn, money while also sharing the clean energy your system generates with your neighbors. Some states have laws and other regulations in place regarding net metering while others may not, and though there are a multitude of benefits, the policy is also surrounded by a bit of controversy.

What is net metering and how does it work?
When people install residential or commercial solar power systems, they are able to generate power from the sun. The main purpose is typically to power the buildings on which the panels are installed, but in many cases, the equipment collects more energy than the building can use. Rather than letting the excess energy go to waste, people are able to share it with their communities by contributing it to the grid. This not only reduces the overall consumption of nonrenewable energy sources, but can lessen the cost of electricity. Sometimes, the solar energy generated by a building will not be enough to match its needs, and the rest of the power will come from the grid, but in other instances, there could be so much power that the building not only relies solely on solar but also contributes to the grid. In this case, instead of a bill, the owner may receive a credit, or even a check, for the contribution. 

Net metering can help solar customers earn money for their energy.Net metering can help solar customers earn money for their energy.

What good can net metering do?
Primarily, net metering helps solar power customers reap a return on their investment, allowing them to offset installation costs more rapidly than just through energy savings alone. The Solar Energy Industries Association indicated that by contributing power back to the grid, energy bills can be reduced even further. But the solar customers are not the only ones to reap rewards from the process. In a 2013 study, the SEIA touted some of the benefits net metering can have for utility companies. For instance, the added energy reduces demand for the grid's existing electricity. It's also worth noting that by relying on residential solar power systems to contribute renewable energy, the utility providers are able to access the clean energy without having to invest in the systems themselves.

"States can more easily meet clean energy goals with the assistance of net metering."

The power of net metering goes even further and can have a positive impact on an entire state. By allowing solar customers to sell their excess power to utility companies, states with laws in place gain a boost to their renewable energy generation and consumption. In turn, this can bolster green efforts and help states meet both short- and long-term goals by encouraging more residents to invest in their own solar power systems. As there are incentives for states as well as individual consumers and businesses for installing solar, the ability to reach these goals is even more essential.

Why are some opposed to it?
For solar power customers and eco-friendly advocates, net metering offers a plethora of benefits. It reduces the consumption of non-renewable energy and helps bolster the adoption of clean energy sources while creating more options for financing solar power. However, not everyone supports the system. Solar customers are typically paid retail price for the energy they contribute to the grid. Some utility companies have said that this is creating a financial deficit for them, as they claim the costs they see on their end outweigh the benefits, but an Environment America report indicated the value of the energy may far outweigh the retail price. The report took into consideration more than just the monetary value as well, considering factors like the avoided cost of environmental compliance and the offset energy costs.

Before those interested in solar installation just at the chance to earn money from the electric company instead of paying bills each month, it will be essential to look into the net metering options based on location and availability. The type and number of solar panels can also play a role in the possibility to getting into the net metering game. Solar energy specialists like the helpful folks at Trinity Solar will be able to help people considering the switch sort through their options.

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