What is Net Metering?

What is Net Metering?

If you’re reading this article, I am assuming that you’re considering going solar, you’ve heard about net metering, and you’re working to get a better idea of what it is, how net metering works, as well as its benefits. 

So, what is net metering? 

During the day, when the sun is shining, your solar PV system is converting sunlight into power. But where does the power go? Certainly, your home uses the power created by your solar panels, but sometimes your solar panels generate more electricity than you are using, for example at times when you are not home, and sometimes you use more electricity that is generated by your solar panels, for example at night when the sun is no longer shining. 

If you have a solar battery or a solar battery backup system, any unused power generated by your solar PV system would be stored in your batteries so you could use it later when your solar panels aren’t generating electricity. Also read about solar backup batteries. 

If you do not have a solar battery system, your solar PV system works with what’s called net metering. 

Net metering is an electricity/credit billing system that allows you to generate your own electricity, and use electricity from the grid anytime you need it, at times when your solar power system is not generating power. 

Let us explain this a bit further:

How Does Net Metering Work?

To explain how net metering works let’s pretend you have a solar PV system on your roof. 

During the day, your solar PV system generally generates more electricity than you use and the excess power is directed towards the local grid as it is produced. Your utility recognizes this by giving you credits. Later, when your solar PV system is not generating electricity, you draw power from your local grid, using up your credits. At the end of each month, your utility will bill you for the “net” energy that you used that month, meaning, the difference between the energy your solar PV system produced and the energy consumed by your home over the monthly billing period. 

If you were to look at your electricity metering, you will see it running backward during the day, as power is fed to the grid. 

Well designed solar PV systems take your monthly and annual electricity usage into account and are designed with net metering in mind, meaning, your solar PV system will generate enough electricity to offset your energy needs 100% so that you never have to pay for electricity supply. 

This, in a nutshell, is net metering