How Net Metering Works

You may have read about or come across the term “net metering” while researching if you should go solar.

Net metering allows you to sell surplus energy produced by your home’s solar panels back to your utility company. It is essentially a billing tool that uses the electric grid to store surplus energy generated by your home’s system.

Net metering can reduce your monthly utility bills and help offset the cost of going solar.

How Does Net Metering Work?

If your home’s solar system generates more energy than you are using, that excess electricity is sent back to the electric grid. This causes your electric meter to run in reverse when this happens.

When you use more energy than your home’s solar system is currently generating, you are pulling electricity back from the grid. This will cause your electric meter to run forward. At the end of the month or year, your utility company will bill you for the net amount of energy you put into and took out of the electric grid. This is why it is called “net metering.”

If you produce more energy than you consume, you will receive an economic credit from your utility provider. The economic value of these credits will depend on your utility provider and the state you live in.

We recommend you contact your local utility provider for details on how their net metering program works, so you can get the most benefit out of net metering for your home.

Benefits of Net Metering

Lower Utility Bills

The biggest benefit of net metering for homeowners is reducing the cost of your monthly electric bills. Your solar panel system is designed to offset your energy use costs, which can lead to saving tens of thousands of dollars over the lifetime of your home’s solar system.

Shorter Payback Period

Net metering can substantially reduce your monthly energy bills. This will allow you to recoup the cost of installing your solar system much faster than someone who does not take advantage of their local net metering program.

Take Pressure Off the Electric Grid

When you go solar, you are not using electricity from the grid but instead you are using the electricity that your home’s solar system generates. This means there will be fewer people drawing power directly from the electric grid.

If your home’s solar system generates excess energy and you send it back to the grid, that energy will be used by other utility customers for their energy needs. This takes even more pressure off the electric grid and makes your local grid more stable.

Net Metering Resources

DSIRE Incentives Database

The Database of State Incentives for Renewables and Efficiency (DSIRE) is a comprehensive database for homeowners to search for and find solar energy incentives in their individual state and across the country.

State Net Metering Policies: Policy Overview

The National Conference of State Legislatures (NCSL) provides a State Net Metering Policy Overview. The Policy Overview can help answer questions you may have about net metering policies, net metering system types, and other net metering benefits available to you in your state.

  • Federal Solar Tax Credit: How It Works

    If you’re considering going solar, you have most likely heard about the federal solar tax credit. The investment tax credit (ITC), which is frequently called the federal solar tax credit, allows you as a homeowner to deduct 30% of the cost of installing your solar system from your federal taxes.

    Read Article
  • How Solar Tax Credits Work

    Going solar is a significant investment, but it is also one of the smartest investments you can make as a homeowner. If you are researching how to go solar, you have most likely read about the different state and federal solar tax credits available to homeowners.

    Read Article
  • How Solar Rebates Work

    Solar rebates are an easy way to reduce your cost of going solar. Rebates are incentives you receive upfront when you install solar panels for your home. States and utility companies can provide rebates at a fixed flat rate regardless of the size of your system. Other utility rebate programs will depend on the size of your home’s system - the amount of kilowatts (kW) you installed for your home.

    Read Article
  • How Solar Property Tax Exemptions Work

    According to the U.S. Department of Energy, a home’s resale value increases by $15,000 when a solar system is installed. Most states offer solar property tax exemptions as an incentive for homeowners to go solar. Solar Property Tax Exemptions remove the added value of a solar system from the valuation of your home for tax purposes. While the value of your home increases due to installing solar, your state property taxes will be for the pre-solar value of your home which is lower.

    Read Article
  • How Net Metering Works

    You may have read about or come across the term “net metering” while researching if you should go solar. Net metering allows you to sell surplus energy produced by your home’s solar panels back to your utility company. It is essentially a billing tool that uses the electric grid to store surplus energy generated by your home’s system.

    Read Article
  • Should You Go Solar?

    Many homeowners are currently asking themselves “Should I go solar?” The cost of switching to solar has dropped 70% over the past decade while the average utility bill has increased by 15%. The huge drop in price along with the many tax credits, rebates, and other financial incentives available to homeowners has made solar into an attractive option.

    Read Article
  • How to Convert to a Solar Power Home

    Over 1 million homeowners in the United States have made the switch to solar this past decade and that number is expected to reach almost 14 million (1 out of every 7 homes) by the end of this decade. If you’re one of the many homeowners who plan to go solar, we recommend you follow this process to convert your home to a solar power home.

    Read Article
  • How to Choose a Solar Panel Installer

    We recommend that you do research about potential solar installers before you schedule a meeting with them. This will save you a lot of time and ensure that you are speaking with a solar installer who you can trust.

    Read Article