If you have solar panels on your home or business you are probably not using all the electricity you generate. During sunny hours especially in the middle of the day your system might produce more power than you need. So what happens to the extra energy? That is where net metering comes in.
Net metering is a billing arrangement that allows you to send unused electricity back to the grid in exchange for credits on your utility bill. When your solar panels produce more energy than you consume the surplus flows into the local power grid. Later when your system is not generating enough power such as at night or on cloudy days you can use those credits to offset the electricity you take from the grid.
This system is a huge advantage for solar users because it keeps energy costs low and makes the return on investment for solar panels more attractive. In many cases homeowners with net metering can reduce their electricity bills by 50 percent or more depending on how much energy they generate and use.
Net metering policies vary by state and utility provider. Some offer one-to-one credit meaning every kilowatt-hour you send to the grid is worth the same as one you take later. Others might use time-of-use pricing where credits are worth more or less depending on the time of day. It is important to understand the rules in your area so you can maximize your benefits.
One thing to keep in mind is that net metering does not mean the utility company pays you cash for your extra energy. Instead you build up a credit balance that lowers your bill. At the end of the year if you have generated more than you used some programs offer a payout or allow you to roll credits over but this depends on your provider.
Installing a solar system with net metering can also increase the value of your property and reduce your carbon footprint. It is a step toward more energy independence and a great way to make use of clean renewable power.
If you are considering going solar talk to your utility company or energy broker to learn more about how net metering works in your area. It is one of the most effective tools available to make solar energy even more affordable and impactful.