Net Metering
A billing system that credits solar panel owners for excess electricity they generate and send back to the grid.
What You Need to Know
Net metering is a billing system that credits solar panel owners for excess electricity they generate and send back to the grid. It allows solar customers to offset their electricity costs by receiving credit for the excess energy they produce.
How Net Metering Works:
- Solar panels generate electricity during the day
- Excess electricity flows back to the grid
- Utility company credits your account for excess energy
- Credits offset electricity costs when panels aren't producing
- Monthly or annual settlement of credits
Billing Process:
- Utility measures electricity consumed from grid
- Utility measures electricity sent back to grid
- Net consumption = Grid consumption
- Grid production
- Customer pays only for net consumption
- Excess credits may carry over to next month
Benefits for Solar Customers:
- Reduces or eliminates electricity bills
- Maximizes return on solar investment
- Simple billing system
- No need for battery storage
- Credits excess production
State Variations:
- Net metering policies vary by state
- Some states have caps on system size
- Credit rates may differ from retail rates
- Time-of-use rates may affect credits
- Grandfathering rules for existing systems
Credit Rates:
- Full retail rate in most states
- Time-of-use rates in some areas
- Avoided cost rates in some states
- Varies by utility company
- May change over time
System Sizing Considerations:
- Size system to match annual consumption
- Consider future electricity needs
- Factor in EV charging if planned
- Account for energy efficiency improvements
- Avoid oversizing to maximize credits
Future of Net Metering:
- Some states transitioning to different models
- Time-of-use rates becoming more common
- Battery storage becoming more viable
- Grid services compensation emerging
- Policy changes may affect existing systems
Alternatives to Net Metering:
- Feed-in tariffs (fixed rate for excess energy)
- Time-of-use rates
- Demand response programs
- Battery storage systems
- Community solar programs
Sources & References
This information is sourced from authoritative government and academic institutions:
- energy.gov
https://www.energy.gov/energysaver/solar-and-your-home
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Related Terms in Policy & Economics
Carbon Dividend
A policy that rebates carbon-tax revenue equally to households so most people receive more back than they pay.
Carbon Footprint
The total greenhouse gas emissions caused by an individual, organization, or product, measured in CO2 equivalents.
Carbon Offset
A reduction in greenhouse gas emissions or increase in carbon storage to compensate for emissions made elsewhere.
Carbon Tax
A government policy that charges emitters a fee for each ton of carbon dioxide they release into the atmosphere.
Electric Vehicle (EV)
A vehicle powered by an electric motor and battery pack instead of an internal combustion engine.
Energy Efficiency
Using less energy to perform the same tasks, reducing energy waste and costs.