Many homeowners who are considering going solar have heard of net-metering, but aren’t sure how it works. In simple terms, net metering is a billing mechanism that offers credits for excess energy sold back to the grid by customers with solar systems.
But how does net metering work? What are the benefits? Here’s a quick overview of what net metering is and why it matters.
What is Net Metering?
If you’re familiar with a basic electrical meter, you know that as your home or business uses energy, the numbers on the meter increase. The meter records the direction of the flow of energy into your structure. In most homes, this is the extent of how the process works, with the structure connection consuming the energy.
However, on a structure that has a solar installation, your solar panels can generate more energy than your home uses. In this situation, your panels feed the excess energy back to the grid. In this case, the meter numbers will run backward, making up part of the energy that you use when the sun is down.
How Does it Impact Your Solar Installation?
Net metering allows your solar system to sell that electricity back to the grid. Many states now have net metering laws. Those who don’t often have utilities providing net metering programs voluntarily may be doing so due to regulatory decisions beyond state law. The differences that you’ll see between local implementation policies, regulatory decisions, and state laws are why solar customer compensation mechanisms are so widely varied across different parts of the country.
When your house or business is net-metered, it moves forwards when you’re using energy from the power company, and backward when you’re supplying energy to the power company. In this situation, the power company is already aware that you have a solar installation and a net metering customer (since they swap your electric meter after your solar system is installed and has passed the necessary inspections), which sidesteps some of the potential billing issues and confusion that can otherwise occur.
In many cases, you may generate more power on your solar panels than you use overall, so instead of confusing billing, you’ll get a check from the power company every month you provide a net surplus to their power grid.
What are the benefits of Net-Metering?
Though it may initially seem like an additional expense, net-metering provides you with a wide range of benefits, including being paid for your power generation when it exceeds your usage.
Solar energy also offers a range of benefits to your power company, such as reducing the demands and cost of power generation and transmission over long distances by providing power generation close to the sources where it will be used.
If you are considering going solar feel free to reach out to us today with any questions, get more information on adding solar power capability, or schedule a consultation.
Further Reading & Resources
[1] https://www.seia.org/research-resources/net-metering-facts
