June 27, 2016

What is net-metering? Why is it important? How does it work?

Solar Energy

Table of Contents:

What is net metering and how does it work?

Our world runs off of technology and because of that we depend on electricity to power everything we use!  Solar energy plays a growing and important role in our nation’s energy and because of that, electric utilities have been leading the solar charge.  If you didn’t know already, solar power is the most abundant renewable energy resource we have available on Earth.  So let’s channel that energy and use it to our advantage!  Today we’ll cover a topic that is widely used in the solar industry – but to normal folks (such as ourselves) it’s a term that is not widely recognized.  I’m here to help break down net-metering into three simple things: What it is, why it’s awesome, and how it works.

Let’s begin:

The What: Net-metering is a billing option provided by electric utilities for consumers who “self-generate” their own electricity.  Simply put, it enables self-generating customers to sell excess electricity to the utility company.

The Why: By participating in net-metering, you can reduce the amount of money you spend each year on energy.

The How: Utility customers who can generate their own electricity from solar are able to sell the electricity they don’t use back to the “grid” in exchange for “credits” on their bill.

Net metering allows you to sell extra power back to your utility

Just imagine this: Every day when the sun rises; tens of thousands of households and businesses utilize the sun’s amazing energy, thus helping them to be energy self-sufficient.  They’re saving money on their bills while helping the environment.  Of course, how solar works for one neighbor might be different than how it works for others.  It all has to do with how much electricity their solar system generates and how much they consume on a daily, monthly, and annual basis.

Sometimes these households might produce more power than they use.  When this happens the energy surplus is sent back into the “grid.”  Other times these homes and businesses might use more power than their solar panels can generate, so depending on their consumption, they might end up with a charge on their upcoming bill.

These households can also export their electricity to the “grid” when rates are higher and can use electricity when prices are lower during certain periods of the day, like at night (commonly called Time-of-Use).  In this case, the household might actually get a credit for the month even though they’ve used more energy than they’ve exported.  Credits that accumulate in a given month can offset charges the households receive in other months.  These credits are called: Net energy metering (NEM)!

To make sure you have the full picture, these homes and businesses will receive a regular monthly bill that includes a minimum electric service charge as well as a NEM statement with monthly and annual snapshots of their charges and credits.  Then every 12 months, approximately on the solar system’s install date, they get a “true-up” statement that settles all the charges and credits they’ve received over the past year – If they have a balance remaining it tells them what amount is due.  If they have a credit remaining, then it’s reset to zero and nothing is owed.  It also indicates if these homes and businesses are eligible for net surplus compensation if they generated more energy than they consumed in total over the year.

But whatever kind of solar household or business you are, there is one more thing to know.  Everyone with solar can save money on energy while making a difference for the environment.  That’s just a quick look at what you can expect when you use solar as a renewable resource.

Watch for our next post about valuable tax credits and incentives that only rooftop solar customers can claim! This is the cherry on top for our customers!

Is solar a good fit for your home?

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If you are considering going solar, the first step is to get a solar savings report to determine if solar is right for you and your home. Click the button below to get your solar savings report now!

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Nick Gorden

Nick Gorden is the Co-founder and CEO of Shine Solar. Nick’s energy, enthusiasm, and leadership is contagious and has contributed to attracting a talented and successful executive team. His time is focused on strategic growth, maintaining profitability and creating the optimal customer experience. Nick has started, managed and sold companies within the communications, mortgage lending, insurance and real estate industries resulting in tens of millions of dollars of market value to investors.

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