See this guy above? Right. He’s actually a meter reader. On a Segway. I’m not sure why he’s smiling so broadly, he should be freaked out since many of you are about to learn how the utility company who employs him is required to pay you for the electricity your home or business produces with sun power. He might not be able to ride fancy schmance segways in the future with all of you cutting into the expected margins of his power company.
That’s right, some utilities offer customers with photo-voltaic (i.e., solar or PV) systems the option to “net meter” excess power generated. Basically, when the PV system generates more power than the household or businesses can use, the utility pays the full retail price for this power in an even swap as the electric meter spins backward, and your PV power goes into the grid. Net metering allows eligible customers with PV systems to connect to the grid with their existing single meter.
Almost all standard utility meters can measure the flow of energy in either direction. The meter spins forward when electricity is flowing from the utility into the building and spins backward when power is flowing from the building to the utility. For example, in one utility program, customers are billed monthly for the “net” energy consumed. If the customer’s net consumption is negative in any month (i.e., the PV system produces more energy than the customer uses), the balance is credited to subsequent months. Once a year, on the anniversary of the effective date of the interconnection agreement, the utility pays the customer for any negative balance at its wholesale or “avoided cost” for energy, which may be quite small, perhaps less than 2 cents per kilowatt-hour.
Net metering allows customers to get more value from the energy they generate. It also simplifies both the metering process (by eliminating the need for a second meter) and the accounting process (by eliminating the need for monthly payments from your utility). Be sure to ask your utility about its policy regarding net metering.
Under the federal Public Utility Regulatory Policies Act (PURPA), utilities must allow you to interconnect your PV system. They must also buy any excess electricity you generate, beyond what you use in your home or business. If your utility does not offer net metering, it will probably require you to use two meters: one to measure the flow of electricity into the building, the other to measure the flow of electricity out of the building. If net metering is not available, the utility will pay you only a wholesale rate for your excess electricity. This provides a strong incentive to use all the electricity you generate so that it offsets electricity you would otherwise have to purchase at the higher retail rate. This may be a factor in how you optimize the system size, because you may want to limit generating excess electricity. A “dual metering” arrangement like this is the norm for industrial customers who generate their own power.
After your new PV system is installed, it must be inspected and approved by the local permitting agency (usually a building or electrical inspector) and most likely by the electric utility with which you entered into an interconnection agreement. Inspectors may require your PV provider to make corrections (which is fairly common in the construction business). A copy of the building permit showing the final inspection sign-off may be required to qualify for a solar rebate program.
Source- U.S. Department of Energy – Energy Efficiency and Renewable Energy: A Consumer’s Guide – Get Your Power from the Sun