An Overview of Net Metering

Net metering is a solar incentive that allows you to receive credits by storing your excess solar energy in the electric grid that is shared by everyone. When your solar panels produce power that you don’t need, that energy is sent to the grid. In exchange, you can pull that excess energy from the grid when your system is under-producing; like during a storm or nighttime.

The right size solar energy system will allow you to produce enough electricity to match your home’s electricity use for the entire year. However, the amount of electricity your solar panels produce will vary seasonally. Net metering helps you account for these differences. You’ll be credited by the power company for the excess electricity that your panels produce. This way, you can use that power later. This is great for you because you won’t have to invest in an expensive battery system to power your home when there is limited sunlight. You can instead simply rely on systems that are already in place.

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Net metering

How It Works

Excess electricity is fed into your electric utility’s grid when your system is producing more than you need. When this happens, your meter actually runs in reverse. When your system isn’t producing enough electricity, you can draw energy from your utility grid. This “back-and-forth” between your system and the grid ensures that your excess production will not go to waste. This also ensures your shortages will be met when needed. With net metering, the excess electricity your home produces later covers the times when it doesn’t produce enough.


Most homes equipped with solar produce excess electricity in the summer months require electricity from the grid in the winter. Your utility company won’t send you a monthly check when you produce more than you need. Instead, you will build up extra “credits” during these summer months. This way, you can use them at night and during the winter months when your system may not be producing enough energy for your needs. With the right design, your system can generate enough power to match your total electricity use for a year. No issues.


Does this replace the need for a solar battery?

Net metering is like having the grid serve as a giant free solar battery. Rather than needing to purchase your own smaller, more expensive battery for your home, use systems already in place. Some people install an energy storage system to take their home “off the grid”. However, they won’t have access to the free benefits of net metering, as explained above. In most cases, staying connected to the electric grid is your best, and cheapest option. Sure, home solar battery systems can account for hour-by-hour variations in solar electricity generation. However,  they aren’t large enough to provide the seasonal “smoothing” benefits of net metering.

Thanks to net metering, homeowners are credited for the energy that their solar panels generate at the same rate that they would pay to their utility. As a result, you can save tens of thousands of dollars on electricity costs over the lifetime of your solar energy system.

Note: Due to lack of sunlight, those who install solar panels in the winter months may experience a higher electric bill during these initial months. This occurs because your solar panels have not had time to overproduce in summer months to store up credits. It is important to note, though, that your energy costs will all balance out come summertime.
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