2 May, 2023 < 1 MIN READ

How to Unlock the Benefits of Net Metering

What Is Net Metering?

When it comes to solar energy, there are several obvious advantages such as cost savings and environmental benefits. But one lesser known advantage is net metering. 

Net metering is a great way for homeowners who have a solar panel system or are considering going solar to get the most out of their system by reducing or eliminating their electric bills. We’re covering everything from how net metering works and its various benefits to common misconceptions about the process. 


What Is Net Metering? 

With net metering, you can actually make money from the solar energy generated by your panels that goes unused. Panels typically generate more clean electricity than what’s required by typical households, and anything that isn’t used up can be sold back to your utility company at retail rates. 

Different states have different guidelines regarding solar energy net metering, and policies can vary drastically. In some states, net metering programs are offered voluntarily, while in other states these programs are a result of regulatory decisions. Generally, net metering is designed to encourage the use of solar energy and provide incentives for homeowners and businesses to invest in solar systems. However, it’s still crucial to do your research to understand what applies where you live before making any decisions. 


How Does Net Metering Work? 

In order to take advantage of net metering, you must be connected to the grid – which is the case for most homeowners. Even with a highly efficient solar system, access to the grid is necessary during times when there is limited sunlight. During storms, cloudy days, or shorter days in the winter, the grid serves as a place to draw electricity from if needed. 

Through net metering, the excess electricity generated during optimal energy generating periods can be sold back to the grid. In return, households are only billed for the net amount of electricity that their household consumes. 

Advantages of Net Metering

1. Control Over Utility Bills 

Homeowners and businesses have the potential to offset their electricity bills by producing solar energy. Through the net metering process, excess power generated through renewable sources can be returned back into the grid – earning a credit on future utility bills. 


2. Support the Grid 

By contributing your solar power to the grid, you are not only making a positive impact on the stability and sustainability of local energy sources, but also reducing carbon emissions from transporting nonrenewable sources into the community. With this simple action, you can make significant strides toward protecting the environment. 


3. Quicker Payback Period

Investing in solar can be a great way to save money on electricity bills. The payback period is the amount of time it takes for your savings from switching to solar energy to exceed the cost of installation. Essentially, when you’ve recouped what was originally spent and all extra generated power after that point is free. 

Net metering helps speed up this process, with full retail net metering speeding things up even more by allowing greater overall savings across states where it’s available. States offering full retail net metering often have significantly shorter payback periods, allowing homeowners and businesses to reap their rewards quicker. 


Types of Net Metering 

1. Bidirectional Net Metering

Net metering offers an energy system that benefits both customers and utilities. By transmitting electricity in two directions, users can tap into their renewable energy systems to generate power for themselves while also selling any surplus back to the utility company – resulting in credits being applied toward your bill. 


2. Virtual Net Metering

Virtual net metering gives homeowners the chance to join forces. With virtual net metering, the energy generated by the system is credited to the participating customers’ accounts. Through this style of net metering, customers can get credit for energy produced from an offsite system – even if they don’t own it. 


3. Time-of-Use Net Metering

Time-of-use net metering gives customers with solar systems the opportunity to maximize savings by effectively managing when they generate and consume electricity. With this helpful billing arrangement, excess power generated during high peak hours is credited back to the customer’s account – allowing them to reduce costs incurred from using more expensive electricity at certain times of day. 

How Will I Be Paid for Net Metering? 

You won’t receive a paycheck from net metering, but instead you receive credits on your bill or statement that can be used to reduce costs for future electric consumption. The greater your contribution to the grid, the bigger savings. 


What States Offer Net Metering Incentives?

If you’re ready to explore the benefits of net metering, let’s dig into the details. Despite differences in state incentives, 40 states currently have net metering policies in place. From California to New York and beyond, harnessing the power of solar energy has limitless potential. For specifics by state, you can consult resources such as The Database of State Incentives for Renewables & Efficiency (DSIRE) – in order to determine which incentives you’ll be eligible for within your region. 

Final Thoughts

Net metering offers homeowners the chance to put their extra solar energy to work and get paid for it. With net metering, you can maximize the efficiency of solar by using any excess power they produce during peak hours or sunny days – getting compensated in return. It’s a win-win solution that keeps clean energy from going to waste. No matter which arrangement ends up working best for you, net metering is a great opportunity to get the most out of your solar panels. 


Is solar the only energy source net metering applies to? 

Solar is the most popular renewable energy choice, but depending on your state’s net metering regulations, you could take advantage of other sustainable sources like wind turbines. 


Do net metering credits expire? 

Rollover policies can differ from state to state, but the majority of the time summer-generated solar energy credits will remain intact from month-to-month and sometimes even carry over to the next year. This way, the shorter days in winter are no problem because you’ll have enough credits built up when energy is in short supply. 


Is net metering available everywhere? 

Net metering policies vary by state and country. Some places have robust net metering policies, while others have limited or no policies.