Homeowner's Guide — Education

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.

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