What Is Net Metering and How Can It Save You Money?

Written by U.S.SolarEnergy

Switching to solar has many financial benefits, but few have been as influential on the solar industry as net metering. For grid-tied solar systems without battery storage, net metering is a policy that allows you to benefit from every bit of electricity your solar panels generate. It does this by requiring your electric company to give you credit for the excess electricity your solar system produces.

How Net Metering Works

On a typical sunny day, your solar system will often produce more electricity than your house

consumes – this may happen during the week when everyone in your home is at work or school. When your solar panels start to generate more electricity than you use, the utility meter effectively “spins” backward and provides you with credits. These credits can be used when the solar system is not producing electricity. 

Now let’s say your solar system is producing less electricity than needed to power everything in your home – this could happen at night or on a cloudy day. The grid will automatically kick in and supply you with the required electricity.

In effect, net metering is the perfect way to track the flow of electricity to and from your home.

At the end of the month, your utility will bill you only for the “net” electricity consumed – the difference

between the electricity produced by the solar system and what is consumed from the electric company. In many cases, your bill can be close to zero.

The graph below shows the electricity flows in a typical home. The green bell-shaped curve is

the electricity generated from the solar system, the area shaded in white is the electricity consumed directly from the solar system, and the area shaded in green is all the electricity injected into the grid.

From about 9 AM to 5:30 PM, the solar system is consistently producing more electricity than is

being consumed – that excess electricity passes through your utility’s electric meter, providing

you with a credit on your account.

At 6:00 PM, the solar system provides part of the home’s electricity needs, and the electric company automatically supplies the rest. By 6:30 PM, the solar system stops producing

 electricity and the grid supply all of your energy needs.

Switch To Solar Today

Net metering ensures you can use all of the electricity produced by your solar system. Every second your solar panels are in operation, they save you money. Net metering allows low-cost, renewable energy to flow into the grid sustainably, helping you save even more on your solar investment. Because net metering policies vary from state to state, ensure you learn about your state’s net metering policy.

If you have questions about the net metering policies in your region or how much solar can help you save annually, don’t hesitate to reach out to our trained experts!