Net Metering

Net Metering

Most solar panel systems are tied directly into the grid. This allows homes to receive electricity when solar energy runs low because of cloud coverage or when demand outstrips supply.

There are also times when solar panels produce more energy than the home needs, and the system automatically sends solar power back into the grid, otherwise known as net metering.

How it works

Solar metering laws allow all customer classes to take part in these programs. Net metering provides yet another avenue to reduce your utility bill – besides the already cost-controlled, affordable electricity homeowners pay for. Once you install your solar panels, the system does the rest.

Homeowners receive credit for every kilowatt-hour of electricity sent back into the grid through net metering. On average, this results in 20 to 40 percent of a solar panel’s lifetime generation, according to the Solar Energy Industries Association.

For example, a 4-kilowatt solar energy system will negate roughly 4,900 kilowatt-hours of electricity usage each year, an estimated annual savings of $400 for the homeowner.

Benefits of net metering

The grid is an unstable entity. Electricity demand skyrockets during peak demand hours – usually 9 a.m. to 5 p.m. for businesses and after 5 p.m. for homes, varying seasonally. When there’s not enough supply to meet demand, brownouts and blackouts occur. Fossil fuel-burning power stations are often brought online to bridge the gap, but the carbon emissions they produce outweigh the benefit of meeting demand.

Net metering stabilizes demand with the clean solar energy your home generates, which can be sent to a neighbor’s home or elsewhere in the system.

Another benefit net metering provides include further control over energy costs and the potential for monetary gain from your solar panel system. Solar metering laws differ from state  to state, each having its own cap on how much energy can be fed back into the grid. These laws constantly evolve and the maximum amount of solar power able to be sold back expands regularly in solar-friendly states.

Regardless of where you live, every homeowner has the opportunity to claim reductions in their utility bill through net metering. During the day, it’s highly likely you’ll produce more solar energy than you’ll need or use. Net metering helps make sure you’re compensated for it.