What Is Net Metering

Let’s get down to it, what exactly is net metering? Solar energy systems produce electricity at different rates depending on the time of day or year. They hit their peak production in the afternoons when most people tend to be out of the house. So, how does one make up for these missed periods of peak electrical production? That is where net metering comes into play. Excess electricity that is produced and not being used will be fed into an electric utility grid, also known as net metering.

How It Works

Homeowners will be credited for the excess electricity provided by their panels so they can use it later on. Net Metering is by far the most common way that utility companies can compensate homeowners for choosing solar. When they credit you, it is never done by means of cash or money payments, but instead by energy credits that you can put towards future usage. It is common to overproduce in the summer months and daylight hours and not even get billed for energy usage during those months. Instead, you will get those credits built up to use in the upcoming winter months when production is lower. Learn more about Net Metering Policies in your state by visiting www.ncsl.org.

Net Metering Saves You

Paying a lower electric bill is one of the main attractions of switching to a solar energy system. Net metering results in homeowners saving tens of thousands of dollars over their lifetime on the cost of electricity. Nearly all net metering policies are designed so that homeowners are compensated for the total amount of energy they consume in a year’s time at a retail rate. Compensation is much lower for any energy that is produced beyond that year. For this reason, solar designers normally recommend a system size that produces slightly less than the customer’s total energy needs.

Understanding the net metering process provides perspective when you are making the decision to switch to solar. It gives a bigger picture and shows how switching to solar will put more money in your pocket.