You may wonder, just what is net metering? Net metering measures the energy your solar panels produce and then matches it against how much power you use. The difference is the net you get as either a credit or a bill.
Here, we will explain net metering and answer key questions around the topic, such as how net metering works and whether net metering is worth it.
How Does Net Metering Work?
Solar net metering measures your power consumption against the power your solar panels produce. When you produce more solar energy than you use, the difference is credited back to you. On days when you are using more energy than your solar panels are producing, you draw against those credits. At the end of the billing cycle, you may have a net credit on your bill, or you may have a balance to pay.
The Benefits of Net Metering
Solar energy is considered intermittent energy, meaning it isn’t always predictable or available when you need it. Learn more about how solar energy works to get a better idea of intermittent energy. Net metering helps even out your solar energy production against your total usage. You can tilt the balance in your favor by investing in energy efficiency projects and by putting energy-saving tips into action to improve your chances of receiving energy credits on your bill.
Here are the key benefits:
- Can save money because you only pay for energy used in excess of what you produce
- Makes solar power more financially viable and practical
- Is a simple way to possibly earn money from the energy your solar panel system produces
- Encourages new solar panel installations
Potential Drawbacks of Net Metering
Now with a better understanding of net metering in solar, how does net metering work and its benefits, there are a few drawbacks:
- Solar net metering is not available in all locations or from all electricity providers
- You need to connect your solar panel system to the grid
- You don’t get paid and don’t earn money from the power you produce
- Without time-of-use billing, your net metering credits are not adjusted according to when you produce power
Alternatives to Net Metering
Given the pros and cons of how net metering works, you may wish to explore alternative ways to maximize the value of your solar panel system. A variety of ways for individuals to get credits and perks from generating solar power are evolving.
Buy all/sell all
In this scenario, you continue to buy all the power you use from your utility company or electricity provider. What is different is that a second meter is installed to track your power generation, and all the excess power you produce is sold back to the utility or provider. The drawback here is that you buy power at the retail rate, but sell it at wholesale.
Net billing
With these kinds of programs, you sell any solar energy you don’t use back to your utility company or electricity provider. Instead of being paid directly, the value of the power you sell is credited on your utility or electricity bill. You will, of course, pay for all the power you buy off the grid.
Solar self-consumption
You always have the option of being both the producer and the consumer of the power you generate from your solar panel system. You can choose to be completely independent from the grid, using only the power you generate, or you can have parallel systems and only use the grid when you need it.
Net Metering FAQs
Can you get paid from net metering?
You don’t get cash in hand with solar net metering. You do get a credit for the energy you produce in excess of what you use.
Which states have net metering?
Most states have net metering policies in place. The exceptions are South Dakota, Tennessee, and Alabama. Texas and Idaho don’t have state-wide policies. Utah and Arizona don’t have net metering but do offer alternatives. The space is changing fast, so check with your electricity provider for the most up-to-date information.
Do net metering credits expire?
You will need to check the policies of your specific electricity provider. In most cases, credits expire annually or according to a specific date in your agreement. In a few states and localities, credits may expire every month.
What is virtual net metering?
You don’t need to buy, install and maintain a solar panel system to get the benefits of solar net metering. Shared solar, wherein several households or investors pool their resources to put in the system, can benefit from virtual net metering. You get a bill credit for your share of the total energy fed back into the grid that reflects your ownership percentage of that shared system.
Does net metering only apply to solar?
While net metering is associated with solar power, it isn’t limited to that energy source. Any power you generate, which could be by wind, hydro, or animal waste from biogas, to name a few, is eligible for net metering if you can effectively connect your power generation to the grid.
Don’t Have Solar but Want to Lower Your Energy Bills?
Installing solar panel systems for net metering is not practical for everyone. That doesn’t mean you can’t use renewable energy. In many states, you have a choice of retail electricity providers, so you may be able to trim your energy costs by selecting the right company. Constellation has a variety of home energy options that give you a choice of energy plans, including fixed-rate plans.