Net-Metering Explained, and Why it Is Good For Solar Power

Jason RothmanMay 2, 201827010

Why net-metering is great for solar

The concept of net-metering is simple. The power you generate with solar panels, minus the power you use, equals a net amount of electricity. Most of us are connected to a grid, so we don’t need batteries to store that excess energy.

Instead, it is just fed into the grid and your neighbors use that electricity. Then at night, when the solar panels are inactive, you use electricity and it’s fed back to your home from the grid. The way to measure how much you generate, how much you use, and how much you give to the grid is with a meter that runs both backward and forward. The measuring process of that meter is called net metering. It’s simple in theory, but there is some more to it.

 Augment Solar Power With a Net-Metering Agreement

Net metering agreements are mandated at a state level in 43 out of the 50 states and in Washington DC, but even in states where they don’t mandate net-metering agreements, most utilities still have their own programs.

Most will also come out and install the special meters themselves at no charge. If you are going to feed power back into the grid, the people who handle the grid will want to make sure everything is installed right. 

Check out FreeingThe Grid Net-Metering Grade State Map to see where your state stands in terms of net metering. 

 Solar Power Moves Bidirectional Meters

Most meters are the simple bidirectional meters that spin backward to record energy flowing from their system to the utility grid, and they are currently eligible for net energy metering. The basic version of these meters are referred to as "non-time-of-use meters" because they don’t record when electricity was used, only how much was used. Some utilities may want two meters for net energy metering, one to measure electricity going from the grid to your home or business, and one to measure surplus energy going from your system to the grid.
Time-of-use (TOU) meters are more sophisticated, recording when electricity is used and allowing the utility to charge different rates at different times of the day or week. These meters can work in your favor because many times you generate power in peak times of the day and send it back to them when they charge higher rates. Then at night when rates are less expensive, you use power from the grid. 

At the end of each month, if you use more power than you generate, you pay the utility that bill, if you use less power, then those credits are carried over to the next month. At the end of the year, you will receive a “true-up” bill from your utility that shows how much power you generated, and how much you used. That leftover power can turn into cash with some utilities. They may pay you the wholesale rate they use when purchasing power from other power companies, but cash from the utility is a lot better than owing them money.

 Solar Power Billing with Net Energy Metering

Under a net energy metering agreement, your utility will continue to read your meter monthly and you will receive a monthly statement indicating the net amount of electricity you consumed or exported to the utility grid during that billing period. If you are a residential or small commercial customer, you have the option of paying the utility for your net consumption monthly or settling your account every 12 months. Contact your utility for billing options.

 Residential Solar Power Eligibility

You are eligible for net energy metering if you are a retail customer of an electric utility in California, you generate at least some of your electricity using solar or wind energy or other qualified generating technologies on your premise, and your generating system's peak capacity output is 1,000 kW or less. Here is the actual copy of what SMUD the local Sacramento Utility says:

The net metering option applies to residential, commercial/industrial, and agricultural customers who have a solar or wind electrical generation facility, a hybrid system of both, or a biomass facility with a capacity of not more than 1000 kilowatts. The facility must be located on the customer's premises, operate in parallel with SMUD's transmission and distribution facilities, and must be intended primarily to offset part or all of the customer's own electrical requirements. For SMUD-supplied photovoltaic (PV) systems, an additional meter for PV generation will be supplied as part of the system package. (B) Large Commercial > 20 kW; Agricultural Customers > 30 kW SMUD will pay for and install a single meter, or an equivalent means of metering, capable of registering the flow of electricity in both directions. The customer may be required to pay the cost differential between standard metering and bi-directional metering. For SMUD-supplied photovoltaic (PV) systems, an additional meter for PV generation will be supplied as part of the system package.

Residential Solar Power Helps the Grid with Net-Metering

Net-metering works for both residential and commercial use. It saves homeowners money every month, but an amazing unintended benefit of net metering is that on really hot days when the power grid is loaded, homes and businesses that feed electricity back into the grid help alleviate that load.

There you have it. Net-metering explained. The electricity that your solar panels generate serves your home’s energy needs and reduces your monthly electric bill. The utility We automatically supply additional power to your home when needed day or night. When your system generates more electricity than your home can use, the surplus energy exports to the electric grid, helping everyone else.

To learn more about how you can participate in the solar power revolution, you can visit HahaSmart, and try out our DIY tool. You can see how solar panels look on your roof, and you can design a solar panel system that allows you to participate in net-metering. We can even recommend certified installers who can save you money.

For information relating to going solar don’t forget to visit our solar blog section for more handy guides and articles.

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