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What is Net Metering?

If you have been looking into purchasing a solar installation, you have more than likely come across the term “net metering”.  This billing method plays a large part in the savings that a solar system provides, but what does it mean?  Otherwise called “net energy metering”. Net metering in effect sends excess energy produced by your solar system to the electrical grid that can be used later to offset unmatched needed energy for the rest of your billing cycle. This leads to another question: what is the electrical grid?  “The electrical grid is the intricate system designed to provide electricity all the way from its generation to the customers that use it for their daily needs,” (energyeducation.ca).

Net metering is very beneficial to the system owner because a solar systems’ production often varies from the home or business’ instant energy needs.  On overcast days, production will likely not meet daily needs, but on clear days production will likely surpass needs. In addition, one’s energy consumption varies throughout the day and night.  Most typically, people tend to use more energy in the mornings and evenings, and most people are working away from home during the day (pandemic aside), reflecting a lower consumption rate during the mid-day (when production peaks). By sending that excess energy in the electrical grid, the system works to offset your energy bill for that billing cycle. This running tally, “net amount” of energy during the billing cycle, is what you are billed for. If you produce more than you use in a given billing cycle you will receive a credit per kwh towards the fixed monthly charges your utility charges.

Although net metering is not necessarily applicable to every state and utility company, “…As of 2016, 41 states and Washington D.C. have mandatory net metering rules, and two more have utilities that permit the practice,” (energysage.com).  Also, the benefits to you as the installation owner are undeniable, as reflected in your offset utility bill for that billing cycle. Not only does net metering have fiscal benefits to the owner, but it also provides other productive outcomes.  It helps the utility companies manage the grid by being aware of the energy demand and trends in this demand.  Furthermore, net metering has proven to provide more jobs. According to the Solar Energy Industries Organization, “Net metering increases demand for solar energy, which in turn creates jobs for the installers, electricians, and manufacturers who work in the solar supply chain. Today, the solar industry employs more than 250,000 American workers in large part due to strong state net metering policies which have allowed the solar industry to thrive,” (seia.org).

When a system is created effectively for your home and individual energy consumption trends, net metering will prove to be beneficial for you, by providing energy production tailored to save you the most money on your energy-cost needs. Our Endries Solar & Electric team can be counted on to maximize your savings by sizing your system to take full advantage of net metering billing.