Many people curious about solar often hear words and phrases tossed around that they don’t understand. One of those concepts is probably what we call net metering. But what is net metering, and why should I care?
In short, it is the mechanism that makes residential and commercial solar systems possible and is the way you actually get paid or credited by your electric utility for the extra power you generate.
What is Net Metering and How Does It Work?
Net metering is a fancy term for a special meter your utility installs when you have a solar system in place of the standard electric meter everyone else has.This meter is unique because it doesn’t run just one way, but it can run both forward and in reverse.
The typical electric meter is designed to track your electric use for billing purposes. So, it only runs in one direction. But when you have a solar system on your home or business, you are generating power at different levels throughout the day. Sometimes, you produce more electricity than you need. So,what happens then? The utility will issue you a credit for the extra power that you produce and do not use. This credit will vary based on your utility company.
That’s where your net meter comes into play. When your solar system generates more power than you are using, your special net meter begins spinning backward and deducting the price of the energy you sell off the price of the power you’ve used.
During the spring and summer, when the sun shines longer and more intensely, your solar system is probably producing more power than you need, so you are storing up a lot of credit for use during fall and winter when the days are shorter. That means from January to December you’ll have a minimal electric bill.
Sounds pretty good, huh? That’s why we say that “it pays to go solar” because it really does!
To better illustrate what net metering is all about, watch this brief video and be sure to call us if you have any questions!
Common Questions About Net Metering
Can I set the rate for the power I sell back to the utility?
No. Net metering is implemented by state law or the utility company, and this determines the rate you will be credited. In some cases, you will be credited at the same retail rate you pay for power and in other cases it will be the wholesale rate. Again, this will be utility specific.
Is this available in my area?
Most likely. There may be a few utilities that are still not using it, but not many. Regardless, you should call your power provider before you buy a new solar system just to be sure. Or, you can call Shine Solar at 844-80-SHINE and we can help you.
What happens during fall and winter when the days are shorter?
Even though the days are shorter, the sun is less intense, and it is often cloudy, your solar system is still working! Cloudy days may reduce the power a solar system produces, but it does not stop it from working altogether. Rest assured, it is still providing a significant amount of energy.
Does this mean I’ll get my electricity for free?
No. In order for net metering to work, you must remain connected to the electric grid so you can sell excess power back to your utility or to use it when your solar system isn’t producing all the power you need (for instance, during the evening hours). This means you must pay a small connection fee every month, even if you don’t use any energy from your electric utility. This applies to all utility customers, not just those with solar, and is usually a line item on your electric bill.
Will my utility pay me cash for the power I sell to them?
Your utility will not pay you cash for this energy, but instead will credit it back to your account for use at a later time.
For more information about net metering or other topics regarding solar energy, be sure to visit the Solar Energy Industries Association (SEIA) at www.seia.org or call us at 844-80-SHINE.
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