July 5, 2023

Net metering: What is net metering? And how does it give me money back?

Net Metering

Understanding Net Metering: How It Benefits You Going Solar


Welcome to the Shine Solar blog! In this post, we'll explore the concept of net metering, an essential aspect of residential solar energy. If you're considering going solar, understanding net metering is key to maximizing your benefits. Before we dive in, take a moment to watch this short video on net metering.

If you're eager to learn more, continue reading!

Table of Contents:

  • What is Net Metering?
  • How Does Net Metering Work?
  • 5 Benefits of Net Metering
  • Requirements and Policies for Accessing Net Metering
  • Challenges and Misconceptions
  • Conclusion


What is Net Metering?

Net metering is a billing mechanism that enables homeowners or businessowners with solar panel (or wind turbine, but we will focus on solar) systems to offset their electricity costs and maximize the benefits of solar energy. It allows you to "bank" the surplus energy your system produces and use it when needed, resulting in cost savings.

When your solar panels generate more electricity than your home consumes, the excess energy is sent back to the grid. A special utility meter, called a bi-directional meter, tracks the flow of electricity in both directions—your energy consumption from the grid and the surplus energy you contribute.

At Shine Solar, we have a Net Metering team that works hand in hand with each utility company to ensure we have the best understanding of each utility company's net metering policy. This allows us to maximize the benefits of solar energy for homeowners like you. Our team of experts specializes in designing and installing state-of-the-art solar panel systems that perfectly integrate with each net metering policy. By partnering with Shine Solar, you gain access to personalized solutions that empower you to take control of your energy future.

The surplus energy you feed back to the grid is credited to your account, accumulating as credits with your utility company. These credits can then be utilized to offset the cost of electricity drawn from the grid during periods when your solar panels aren't generating enough energy.

By harnessing solar power and leveraging net metering, homeowners reduce their reliance on the traditional power grid, achieve greater energy self-sufficiency, and make significant strides toward a sustainable future.

Net metering is available in many states across the United States, including the states Shine Solar currently operates in, such as Arkansas, Kansas, Missouri, Oklahoma, and Texas. Our experienced team is ready and eager to install your solar energy system following all the requirements to fulfill the net metering policies and regulations specific to your area, ensuring you can make the best use possible of your solar investment.


How Does Net Metering Work?

Understanding how net metering works is key to fully grasp the benefits it offers homeowners who embrace solar energy. Let's explore the process in more detail.

When you have a solar panel system installed on your property, it harnesses the power of the sun to generate electricity. During daylight hours, the solar panels absorb sunlight and convert it into usable electricity. This energy is then directed to power your home's electrical needs. Any excess electricity produced beyond what your home requires is sent back to the grid.

To facilitate the tracking of your energy production and consumption, a special utility meter called a bi-directional meter is installed. This meter measures both the electricity you draw from the grid and the surplus electricity you send back. When your solar panels generate more electricity than your home consumes, the excess power flows back to the grid, and the bi-directional meter registers this as a credit.

During times when your solar panels are not producing enough electricity to meet your home's needs, such as at night or during cloudy days, you can draw electricity from the grid. The accumulated credits from the surplus energy you previously fed back to the grid are then applied to offset the cost of the electricity you consume. This mechanism ensures that you maximize the value of the solar energy your system generates.

Net metering empowers you to achieve greater energy self-sufficiency and reduce their dependence on the traditional power grid. By utilizing the surplus energy you generate during sunny periods, you can significantly reduce or even eliminate your electricity bills.

At Shine Solar, we specialize in designing and installing solar panel systems that seamlessly integrate with net metering programs. Our team of experts maintains constant communication with utility companies to stay well-informed about their net metering policies. This allows us to ensure you that your system will be configured accordingly, maximizing the benefits of net metering. By generating clean, renewable energy and efficiently managing the flow of electricity between your home and the grid, you can achieve substantial cost savings and make a positive impact on the environment.

It's important to note that net metering policies and regulations may vary depending on your location and each utility provider. Each state has its own guidelines and requirements for participating in net metering programs.

At Shine Solar, we stay up to date with the net metering policies in each state we serve. Our knowledgeable team is greatly informed about the specific net metering policies of many utility companies. This allows us to take every necessary step with your installation to get you the benefits from this program.


5 Benefits of Net Metering

Net metering offers numerous benefits to households who adopt solar energy and participate in net metering programs. Here are some key advantages:

  1. Reduced Electricity Bills: Net metering allows you to offset your electricity costs by using the surplus energy your solar panels generate. The credits earned during times of excess production help reduce or even eliminate your monthly electricity bills.
  2. Maximized Return on Investment: With net metering, you can maximize the return on your solar panel system investment. By leveraging the credits earned through surplus energy production, you can enjoy long-term savings on your energy expenses.
  3. Energy Independence: By generating your own electricity through solar energy, you become less reliant on the traditional power grid. Net metering empowers you to take control of your energy consumption and reduce your dependence on fossil fuels.
  4. Environmental Benefits: Adopting solar energy and participating in net metering contributes to a cleaner, greener future. By reducing your reliance on fossil fuel-generated electricity, you help lower greenhouse gas emissions and combat climate change.
  5. Supporting Grid Stability: Net metering benefits not only you but also the overall electricity grid. By feeding excess electricity back to the grid during peak production periods, you help stabilize the grid and reduce strain on the utility infrastructure.

By embracing net metering, one can experience financial savings, environmental benefits, and increased energy independence.

Shine Solar is dedicated to helping you unlock these advantages by designing and installing solar panel systems tailored for net metering programs.



Requirements and Policies for Accessing Net Metering

To participate in net metering programs and take advantage of the benefits they offer, you must meet certain requirements and adhere to specific policies and regulations. Understanding these criteria is essential for accessing net metering. Let's delve into the key aspects:

1. Solar Panel System Installation: To qualify for net metering, you'll typically need to have a solar panel system installed on your property. Working with a reputable solar provider like Shine Solar ensures that your system is designed and installed to meet all necessary specifications.

2. Bi-Directional Meter Installation: A bi-directional meter is essential for measuring the flow of electricity between your solar panel system and the grid. This special meter tracks both the electricity you consume from the grid and the excess electricity you send back. Shine Solar will coordinate the installation of this meter to ensure accurate measurement and billing.

3. Compliance with Safety Standards: Local utility companies and regulatory bodies have established safety standards that must be met to qualify for net metering. These standards cover various aspects, including electrical system interconnection, equipment certifications, and proper installation practices. Shine Solar is well-versed in these safety standards and ensures that your system meets all requirements.

4. State-Specific Requirements: Net metering policies and regulations vary from state to state. It's important to familiarize yourself with the specific requirements in your state. Here you can some of the differences in the regulations by states.

Net Metering Policies and Regulations: In addition to the requirements outlined above, understanding the net metering policies and regulations specific to your state is crucial. Let's explore some general policies that may apply:

  • Compensation for Excess Generation: Many states have policies in place that determine how utilities compensate households for the excess electricity they contribute to the grid. Compensation can be in the form of credits applied to future bills, monetary reimbursement, or other arrangements. These programs can be categorized into three main types:
  1. Mandatory Net Metering: In states with mandatory net metering, utilities are required by law to offer net metering to eligible solar customers. You receive fair compensation for the excess electricity they generate, typically in the form of credits applied to future bills or monetary reimbursement. For example, Arkansas and Missouri.
  2. Voluntary Net Metering: Some states have voluntary net metering programs where utilities have the option to offer net metering to eligible customers. In these cases, participation is at the discretion of the utility. Households who participate in voluntary net metering programs also receive compensation for their excess generation. For example, Kansas and Oklahoma.
  3. Deregulated Net Metering: In states with deregulated energy markets, net metering programs may operate differently. Deregulated net metering allows you to choose their electricity provider independently from the company that operates the distribution grid. Compensation for excess generation may vary based on the agreement between the homeowner and the chosen electricity provider. For example, Texas.

It's important to note that the availability of these types of net metering programs may vary from state to state.

There are significant differences in the net metering regulation and policies between states, and within those states there are differences in the program rules and guidelines between utility companies. It is important to check with your utility to see what their specific net metering policies are before you install solar panels. Or you can always just call the experts, like Shine Solar, that will make sure to follow those policies for you.
  • System Size Limitations: Some states impose limits on the size of solar panel systems eligible for net metering. These limitations may vary depending on factors such as the type of property (residential, commercial, or industrial) and the capacity of the utility grid. Shine Solar can help you understand the system size limits in your area.
  • Interconnection Standards: Interconnection standards ensure the safe and efficient integration of solar panel systems with the grid. These standards cover technical requirements, such as voltage levels, protection systems, and the process for system approvals. Shine Solar is well-versed in the interconnection standards of the states we operate in.

By understanding both the requirements and the policies and regulations surrounding net metering, you can make informed decisions about adopting solar energy and effectively leveraging net metering programs.


Challenges and Misconceptions

While net metering offers numerous benefits, it's essential to address some common challenges and misconceptions associated with this billing mechanism. By understanding these factors, you can make informed decisions about adopting solar energy and participating in net metering programs. Let's explore some key considerations:

  1. System Sizing and Energy Consumption: One challenge you may face is determining the appropriate size for their solar panel system. It's crucial to consider your energy consumption patterns and future needs when sizing your system. A well-designed system will help optimize your energy production and ensure you can fully leverage net metering benefits.
  2. Net Excess Generation and Credit Rollover: Some homeowners may have rightful concerns about what happens to the surplus credits they accumulate. Depending on the net metering policies in your state and your utility company, excess credits may roll over to future billing periods. However, it's important to note that each state and utility company has its own regulations regarding the expiration, limits, or valuation of excess credits. It's crucial to contact your utility company to understand their specific net metering program rules and guidelines, ensuring effective management of your energy production.
  3. Program Changes and Policy Updates: Net metering policies and regulations are subject to change over time. While net metering has proven to be a stable and beneficial program in many states, it's crucial to stay informed about any potential policy updates that may affect your participation. So stay inform of your state policies changes, or have a group of experts, like Shine Solar, that covers that, keeping track of policy changes and can providing you with up-to-date information.
  4. System Maintenance and Upkeep: Like any electrical system, solar panel systems require regular maintenance and occasional repairs. It's important to consider the ongoing maintenance needs of your system to ensure it continues to operate optimally. Shine Solar offers maintenance services to help you maintain the performance and longevity of their solar panel systems.
  5. Misconceptions about Cost and Affordability: One common misconception about solar energy and net metering is the upfront cost. While the initial investment in a solar panel system is significant, it's essential to consider the long-term financial benefits and return on investment. With net metering, you can recoup their investment through energy savings and potential incentives over time.

By addressing these challenges and misconceptions, you can make well-informed decisions about embracing solar energy and participating in net metering programs.

Shine Solar is committed to providing accurate information and personalized guidance to help you navigate these considerations successfully.



Net metering offers homeowners an excellent opportunity to embrace solar energy and unlock a range of benefits. By understanding how net metering works and the advantages it brings, you can make an informed decision about integrating solar power into your home.

So, in order to remind you, let’s quickly rewind what we have talk about in this blog post:
We explored the fundamentals of net metering, from its definition to how it works. We discussed the requirements to access net metering, highlighting the importance of system sizing, understanding net excess generation, and staying updated on program changes and policy updates.

We also addressed some common challenges and misconceptions associated with net metering, emphasizing the significance of considering system maintenance, cost factors, and accessing accurate information. It's crucial to navigate these aspects to ensure a successful and rewarding experience with net metering.

Moreover, we highlighted the benefits of net metering, including reduced electricity bills, maximized return on investment, energy independence, environmental advantages, and supporting grid stability. These advantages showcase the transformative potential of net metering for homeowners seeking to make a positive impact on their energy consumption and the environment.

Embrace the power of solar energy and net metering to reduce your reliance on traditional electricity sources, lower your carbon footprint, and gain greater control over your energy consumption.

Take the leap into a brighter and more sustainable future with Shine Solar. Contact us today to learn how we can help you unlock the potential of net metering and solar energy for your home.


Remember, if you have any questions or need assistance with your solar installation, feel free to reach out to us. Stay tuned for more informative articles on residential solar power.

If you found all this interesting, but want more information on the matter, there are various resources available to you. Local utility websites, state energy offices, government websites, online solar energy communities and of course here, in our blog, where we have plenty of post of everything related to solar power.

Is solar a good fit for your home?

Find out now!

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!

Get Your Solar Savings Report Now!
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.

Join Our Newsletter

Stay up to date on all of the latest news from Shine Solar

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form

Related Posts