Net metering policies help ensure homeowners get fully compensated for the surplus solar power their rooftop systems generate. Understanding how net metering works and maximizing the associated billing credits provides big returns on your investment in renewable energy.
What is Net Metering?
The experts at solar energy company Vivint Solar explain that net metering is a billing arrangement between solar-powered homes and their local electric utility company. It allows homes with rooftop solar panels to earn credits on their electric bills when they generate more electricity than needed instantaneously.
The home’s utility meter keeps track of flows in both directions – electricity consumed from the grid, and excess energy fed back to the grid from the home solar panels. This two-way netting of power usage results in credits that offset your electric bill.
How Net Metering Credits Add Up
During the sunny midday, your solar system may produce more energy than your home is actively using. Without net metering, this excess would simply dissipate. But under net metering, surplus solar electricity feeds back into the grid for others to use, spinning the meter backwards.
At night when solar generation ceases but you still use power, the meter spins forward as you draw electricity from the grid again. But the credits accrued during solar production help cancel out what you pull from the grid later. Monthly net usage determines your final bill.
Benefits to Solar Customers
Net metering policies provide vital benefits that improve return on investment from home solar:
- Credits make excess solar production valuable to you rather than wasted.
- Eliminates need for expensive battery storage to try catching surplus solar.
- Simplifies managing variable solar generation versus daily usage patterns.
- Allows scaling system size up to match your full electric load if desired.
- Encourages solar adoption by making it pay off for generating surplus.
Net metering makes going solar financially viable without having to size systems only to your moment-to-moment usage. The grid essentially acts as a virtual battery to utilize excess generation.
Policies Vary by State
Net metering policies, compensation rates, and participation limits differ somewhat between utility companies. But 40 states have mandatory laws requiring net metering be offered to solar customers. Some key variations include:
- Caps on the total solar capacity eligible for net metering incentives.
- Size limits on individual home systems able to net meter.
- Seasonal differences in credit rates and carryover provisions.
- Applicable solar fees and fixed charges added to bills.
Check current rules in your state and utility service area to take maximum advantage of net metering. Policies are still evolving, with solar advocates lobbying to maintain full compensation when you overproduce.
Monthly Billing with Net Metering
Each monthly billing cycle provides a new opportunity to use net metering credits. Surplus solar production rolls over month-to-month in some states.
But in states without rollover, excess credits reset to zero each billing cycle. So solar customers strive for perfect net metering – generating just enough to offset monthly usage, without wasted overproduction.
Net Metering Supporting Solar Growth
Net metering has proven an effective policy to incentivize home solar generation. It provides simple, fair compensation for surplus renewable energy fed to the grid. While credit rates and rules evolve, net metering remains vital to get the most from rooftop solar.
Utilities realize the importance too. Net metered solar supply during peak daylight hours helps reduce grid demand. So supporting solar adoption through net metering provides reliability and generation benefits to all ratepayers.
As rooftop solar expands, net metering will allow easy grid integration. Two-way metering and billing paved the way for homes to become both energy producers and consumers.