What Is Net Metering?

Net metering (also known as electric billing) is a tool that allows you to store the excess energy produced by your solar panel system on the grid. Net metering allows you to receive credit for any excess energy that your solar panels generate but you don’t use. If your solar panels do not produce enough power on a cloudy or rainy day, your utility will provide you with energy and count it against the credits that you have accrued over time. As a solar customer, you will only be billed for “net” consumption. The solar industry’s foundational policy is net metering.

What is Net Metering?

Imagine that you live in an area with net metering and have solar panels installed. Your electric meter will reverse if your photovoltaic panels produce more energy during the day than you consume. If your energy consumption exceeds what your solar panels can produce, you can draw energy from the grid. This is true whether it’s during the day or at night. Net metering refers to the method of billing that you receive at the end of a month or a year for the difference in what you have sent into the grid and how much you have taken from it.

Solar energy systems can be sized correctly to generate enough electricity for your home’s annual needs. Your solar panels will generate different amounts of electricity throughout the year. The amount of electricity generated by solar panels varies throughout the year. It’s higher during summer when the sun is high in the sky. You can take these seasonal variations into consideration with net metering. You can store any surplus electricity produced by your solar panels.



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Net Metering


What Is the Net Metering Method?

Net metering is designed to achieve two major goals: encourage the adoption of renewable energy across the country and benefit utilities as well as the whole electricity grid by adding solar energy at a low cost or for free. Solar energy can help balance the costs of purchasing electricity from other sources. This is especially true in summer when electricity prices are at their highest during the hottest and sunniest days of the year.

What Is Net Metering for Electricity Bills?

In general, summer is the time when homes use more electricity and winter is when they produce more. You won’t receive a monthly check from your utility if you generate more electricity than what you use because the fluctuations are predictable. Instead, you will accumulate extra credits during the summer to use at night or in the winter. With the right design, your system can generate enough electricity to cover all of your annual consumption. It doesn’t matter if you have a fluctuating production from month to month.

When your solar system produces more energy than you use in a month, you will be credited for that amount. If you produce less electricity than you use in a given month, you must buy it from the utility. Then you would pay for the electricity that you use, less any surplus generated by solar panels.

Other Types of Net Metering

Solar energy credits are available in many forms, depending on where you live and what options your utility or state offers.

Buy All / Sell All

The buy-all/sell model differs from other metering systems in that it allows the user to sell 100% of the generated electricity to the utility. The user receives 100% of their energy at retail prices. Net-metering of this type requires two separate meters. The user is responsible for the difference between what they produce and what they use. When you use net metering, you don’t consume energy from your panels.

Net Billing

Net billing is most often used for large commercial installations. It is more common in home installations because of the rise of distributed solar systems. The net billing system is similar to the solar energy system in that excess electricity can be stored on the grid.

Net metering refers to a system in which your credits are equal to the amount produced by solar panels per kilowatt-hour. The net billing is often cheaper than what you pay for electricity. Instead of “banking”, you will “sell” the excess solar energy that you have to your utility. Wholesale rates are usually higher than retail rates.

How to Participate in Net Metering

The requirements for solar owners can differ based on their location, as each state has its own net metering policy. Net metering rules can vary among states, and local utilities often have different conditions. Reputable solar companies understand the net metering rules in your area, ensuring your home solar system meets eligibility criteria.

Here are some common net metering requirements, applicable regardless of the program you participate in:

Assistance from Your Solar Installer

Your solar installer can help you navigate the necessary steps for net metering. Some states may require you to complete an interconnection form, and your installer can guide you through the process.

Professional Installation

The majority of electric companies mandate professional installation for a solar power system to connect to the local grid. Do-it-yourself (DIY) solar projects typically do not qualify for net-metering programs.

Local Power Company Requirements

Local power companies may have specific requirements for connecting home solar systems to the grid. Most companies, for instance, stipulate that solar inverters meet particular guidelines. Your installer can ensure that your system aligns with these requirements.

For additional information on net metering policies in each state, you can refer to the Database of State Incentives for Renewables and Energy (DSIRE) map. Notably, some states, such as Alabama, South Dakota, and Tennessee, may not have state policies or utility programs in place by 2023.


Net Metering


Bottom Line – What Is Net Metering?

Net metering significantly enhances the value of solar panels for homeowners. Solar energy systems produce electricity to power home appliances, lighting, and electronics. With net metering, surplus energy generated can be sent back to the grid, earning you power bill credits and eliminating the need for a solar battery installation.

In most cases, the advantages of net metering outweigh any drawbacks. While some states may not pay the full retail value for exported energy to the grid, or allow credit accumulation beyond your annual consumption, these factors are not problematic if your solar panel system is sized optimally for your home’s energy needs.

When combined with the federal tax credit and other solar incentives, net metering enhances the Return on Investment (ROI) of your solar home system. Additionally, the best solar panels typically come with a 25-year product warranty, ensuring long-term savings on your electricity bill. Net metering proves to be a valuable and enduring solution for homeowners embracing solar energy.

Power Your Home with ESD Solar and Net Metering

As we wrap up, consider the possibilities of harnessing solar energy with ESD Solar in South Carolina. Our expert team ensures you maximize the benefits of net metering, turning your home into an energy powerhouse. Say goodbye to excessive power bills and hello to sustainable savings.

Ready to make the switch to solar? Contact ESD Solar today to explore our tailored solar services in South Carolina. 

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