what is net metering

What is Net Metering? How Does it Work? A 2022 Guide

Many people considering adopting solar have heard the term “net metering” but have no idea what it implies.

What is Net Metering?

Simply put, net metering is a utility billing mechanism that provides a credit to household and business customers that generate extra electricity with their solar panel systems and transmit it back to the grid.

How Does Net Metering Work?

During daylight hours, a rooftop solar system can typically generate more electricity than you consume.

With net metering, the homeowner is only charged for the “net” energy spent each month, which is the difference between the energy produced by the solar power system and the energy consumed by the house during the billing period.

When your home or company is net-metered, the meter will run backwards, which means you may receive a credit to offset the electricity you consume from the grid when it’s not sunny or at night, depending on local rules. After that, you’ll only be charged for your “net” energy usage. The extra energy created is fed back into the grid, where it can be used by your neighbors.

Benefits of Net Metering

Net metering can save homeowners hundreds of dollars on their power bills each year, so it’s a strong reason to go solar sooner rather than later.

There’s another advantage to using net metering. Because your solar system generates electricity close to where it will be utilized, it puts less burden on the grid’s distribution and transmission infrastructure and lowers energy loss from transporting voltage many miles from the nearest power plant. While some argue that net metering places an unfair burden on non-solar electricity customers, several cost-benefit studies on net metering have found the contrary to be true.

So, to take advantage of current favorable net metering policies, don’t delay going solar.

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