Solar net metering.

Solar Net Metering Explained: Everything You Need To Know

What Is Net Metering?

Net Metering (Net Energy Metering or NEM) is the pivotal solar power legislation and policy that allows homeowners to see savings through their solar energy systems. Through Net Metering, utility companies store the energy your solar energy system produces and allows you to freely use that energy in the future at any time during your metered year.

How Does Net Metering Work?

When you get your solar power system installed and turned on, your system begins producing energy. Eventually, your panels will produce more energy than what you actually need for your home or property. This extra energy that you don’t use is sent back to your utility’s grid. In turn, the spins your meter backward, showing a surplus of energy to your home. A few days, weeks, or months later, when you may need that extra energy, you can pull the energy that’s been stored in the grid back to your meter and your home. An example is like a bank: you put money in the bank, store up savings, and then take it out at a later time when you need it. Depending on which state you live in, your extra energy credits that you store up from your solar system’s production is “zeroed” out at the end of the month or year and replenished to 0 credits, thus restarting the Net Metering credit process.

If your roof size is adequate and the solar system installed on your roof is large enough, your panels should generate enough power to meet all your energy needs. This isn’t to say that your panels won’t underproduce in winter months or on cloudy days. In fact, this is exactly what Net Metering is for – to pull your excess energy that you over-produce in the summer sunnier months and use it in the lower-end months.

Net Metering is also reflected on your utility bill statement, showing how many credits (kilowatt hours) you used and sent to the grid month by month. Net Metering does not allow you to receive cash payments for the energy your panels produce.

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Why Is Net Metering Necessary?

Net Metering is used to encourage the forward movement of renewable energy adoption in the United States. It is also used to help homeowners, municipalities and utility companies benefit from solar all together. Solar energy in states like Illinois, Indiana, Wisconsin, Florida, California, Arizona, Arkansas and more are seeing great moves into the solar era, largely thanks to Net Metering.

Do I Still Pay An Electric Bill With Net Metering?

With Net Metering, this is almost always an inevitable small connection fee to your utility company’s grid. This ranges anywhere between $10-$17 per month. This still comes in the form of a utility bill that you are still commonly used to receiving and paying. Apart from the connection fee, homes with solar power that cover their power needs fully will generally produce, and in some cases overproduce, the power their property needs. This will result in a balance of only the connection fee, meaning your utility bill will not reflect any extra expenses assuming your credits and power production met your home’s needs.

In the case where your system underproduces, you may see an added utility expense that was pulled from the grid after your energy and credits were used up. This may happen in winter months where production is renewed or slowed down. 

In summary, when your solar system produces more energy than you actually use over the course of a month, you get to receive a credit on your utility bill that is based on the net number of kilowatt-hours you gave back to the grid. In the case where your solar energy system produces less power than you used in a given month, you now must buy the electricity from your utility provider, in turn making up for the difference. This charge would show up on your utility bill as normal.

Can I Go Off-Grid With Net Metering?

In the truest sense, going “off the grid” requires a backup solar battery. These are available to install but can be high in price often. If you don’t have a backup battery, you are not able to go off grid and still take part in Net Metering. However, think of the utility grid as a giant battery for you – you are sending and receiving power from it as needed each month. Staying connected to the grid and partaking in Net Metering allows you to see better savings over time often.

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