Net Metering Explained

Net metering is the way you and your local utility company keep track of the extra power you are generating with your home solar power system. The easiest way is to think of it is net metering is like an “energy bank account.”

During the day your solar panels are generating energy and you are using a large portion of that energy. But, any energy your system produces that you don’t use is being put back on to the utility grid.

That means instead of your utility meter (the image below I am sure you are familiar with) spinning forward like it does for any house without solar installed, yours will spin backwards. This will credit your “energy bank account” for when you need to use/withdraw energy from the local utility company, for example during the night when your system is off.

net metering, solar power for your home

The meter keeps track of the surplus (the energy your solar panels put on to the grid) and/or the deficit (the energy you use from the utility company).

At the end of the year when your meter is read by the utility company they will send you a bill displaying the “net” between what you used and what your solar panels generated. If you deposited more energy onto the grid than you withdrew from it, you won’t owe your local utility company any money.

As for the extra energy you put back on to the grid, do you get paid for that? Well it depends…if Feed-In Tariffs (FITs) exist in you area (e.g. CA, CT, FL, CO, NJ, etc.) then you will be paid by the utility company for the energy you put on the grid. Sadly, in most states you will not be paid for the energy you put back on the grid.

Home Solar Power System Sizing Importance

This is why having a system that is properly sized for your specific energy needs is important. Too large and you will be paying excessive upfront costs and subsidizing the utility company’s energy.

Therefore when sizing you system make sure your system meets your current household energy needs or falls just short, so as not to exceed them.

Anticipate Future Energy Efficiency Improvements

Also make sure you anticipate other future energy efficiency improvements in your calculation.

And remember you can always add another panel later…check out the video below on net metering as well.

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