What is Solar Net Metering and How Does it Work

Many consumers who are thinking about going solar have heard the term “net metering” but aren’t sure what it means.

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What is Net Metering?

Put simply, net metering is a utility billing mechanism available in most states that offers a credit to residential and business customers who are making excess electricity with their solar panel systems and sending it back to the grid.

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How Does Net Metering Work?

When you have a rooftop solar system, it can often generate more electricity than you consume during daylight hours.

With net metering, the homeowner is only billed for the “net” energy used each month, that is, the difference between the energy produced by the solar power system and the energy consumed by the house over the monthly billing period. 

When your house or business is net-metered, you’ll see the meter run backwards, and that means, depending upon local policies, you may get a credit to hedge against the electricity you use from the grid when it’s not sunny or at nighttime. You are then billed only for your “net” energy use. The excess energy generated gets put back to the grid for your neighbors to use.

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The Benefits of Net Metering

Net metering can save homeowners hundreds of dollars on their utility bills every year, so it’s a good reason to make the money-saving choice and go solar sooner rather than later.

There’s another benefit from net metering. Since your solar system is generating electricity near the point where it will be used, this reduces strain on the grid’s distribution and transmission infrastructure and minimizes energy loss from sending voltage many miles from the nearest power plant. While some claim that net metering represents an unfair burden on non-solar electricity customers, many net metering cost-benefit studies have found the opposite to be true.