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What’s “Net Metering?”

Dear Solar Fred,

I hear about “Net Metering” when people jabber about solar. Will someone please explain to me exactly what “Net Metering” is? Also, does it have anything to do with the internet?

Just Wondering Nick

Dear JW Nick,

Net Metering is very important when you’re solar system is tied to the grid, which is most people. (Those with battery back up systems could care less.)

Net Metering has nothing to do with the internet, but refers to your home’s utility meter (that big round thing above) which keeps track of your energy usage. With net metering laws, the utility is required to keep track of your usage and store any extra power your solar panels generate.

Think of Net Metering as a solar powered piggy bank:

  • Your solar panels generate electricity during the day feeding electricity to your refrigerator and whatever else is on. Usually you’re at work during the day, so your electric usage is low and the panels are producing MORE than your home is using and feeding the net metering piggy bank.
  • In other words, Net Metering keeps track of the EXTRA power that your solar panels are generating. When you generate more power than your using, the extra electricity makes your electric meter “spin backwards,” crediting your solar piggy bank account.
  • At night, you come home, turn on the lights, watch TV, but your solar panels aren’t producing any electricity because there’s no sun. Instead, you are withdrawing from your solar piggy bank, using up that extra electricity that your panels created during the day. The electric company essentially repurposes that power to your neighbors and buys less dirty coal.
  • If your house uses more than what you’ve saved up, the electric company charges you their regular coal-powered night-time rates (which is lower than day time “peak” rates.)
  • At the end of the year, the electric company presents you with a bill that is the “net” between what your solar panels generated over the year and what you used beyond that.
  • If your solar installer designed the system right, your entire electric bill for the year could be $100 or less for your entire year!
  • Usually, the utility charges you a small monthly fee, like 5 bucks, to have net metering. Depends on the utility.
  • Solar Fred Caution: If your solar installer designed too large of a system and you are generating more power than you actually used during the entire year, the electric company will NOT pay you for the extra power in California and many net metering states. Your bill will be zero, but you’ll have donated that extra power to the utility company. So it’s important that your system is sized to meet your current household needs or less than your needs, not exceed them. In some States (CT, FL, CO,  others) they will pay for the net extra solar power at various rates.
  • SF Caution#2: If you are planning to buy a new energy efficient refrigerator or some other large appliance after your solar panels are installed, tell your installer. He will design a smaller system. Otherwise, as cautioned above, you’ll eventually be giving away your extra power to the electric company–plus you’ll have paid for an extra solar panel upfront. Keep in mind that you can always add another solar panel later if your electricity needs rise.

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7 thoughts on “What’s “Net Metering?”

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  2. Ron says:

    OK, so a bit of a different billing issue, but still a large issue.
    I have a photo voltaic solar system, so I produce electricity that can go back to the grid and I am suppose to get a credit for it. Basically sometimes I consume electricity from the grid and I get billed for it and sometimes I produce an excess of my consumption and I get a credit for it (although not at the same rate). I have what is called a time of day bi-directional meter. The problem is that there are more the four meter reading categories on the bill and it is extremely confusing. As someone said to me, they couldn’t make it more confusing if they tried.
    My bills have been astronomical. I have a small three bed room ranch and my bills have been in excess of $ 800.00 at times. And thats with an expensive solar system that produces electricity.
    Months and years of complaining have gotten nowhere. Finger pointing between solar installer and JCP&L, with me in the middle paying these bills. I have come to the conclusion that they are not crediting me for my excess because of the numerous meter reading categories and perhaps even charging me for what should be a credit.
    I finally demanded that they install a simpler meter with just two categories and voila my bills are more than cut in half, Problem is they won’t admit to any mistake or over charge for all those past bills.
    My question is has anyone else had a similar problem?

  3. Solar Gal says:

    Do you have an update on the rates being paid to APS net metering customers? My solar system is kicking butt for on peak production, but is not keeping up with my off peak usage.. so will I get a year end rebate?

  4. Kevin says:

    That helps a lot! Thanks!
    .-= Kevin´s last blog ..Treece, Kansas =-.

  5. Kevin says:

    What are the main obstacles to getting a comprehensive “net-metering” or buy back policy implemented? Thanks!

    1. Kevin, it’s very simple: Money. Utilities lose money the more people go solar, but even more money when they buy enough power to cover day AND night time needs via net metering. So getting utilities to see that peak power is more costly than any net metering program is the key.

      If you’re trying to get a utility or state to offer net metering, I would contact Votesolar.org.

      Hope that helps.

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