When doing research on converting your home to a solar energy system, one of the terms you may come across is Net Metering (or Net Energy Metering). When making the decision to go solar, it is helpful to understand the terminology as well as how it will affect your cost of electricity. Solar panels enabled with net metering are a way for you to lower your energy bill and save money all while harnessing sustainable energy. Here are some common questions that we receive relating to net metering and solar panel energy output.
What is Net Metering?
Net metering is when a net meter device is installed on your house during the installation of a solar system. The net meter tracks your production and consumption of electricity: How much energy is your system producing? How much energy is your household using? The energy that the panels produce in kWh is “banked” throughout the year and feeds back into the grid. The production is then applied to your home and your utility bill, lowering your energy bill.
Different states offer different regulations on how much utility companies will pay for solar energy production. Currently, 41 states and the District of Columbia have mandatory net metering rules. If you want to find out the net metering policies in your state, you can check the Database of State Incentives for Renewables and Efficiency (DSIRE).
Why choose Net Metering?
Solar systems generally produce the most energy during the heat of the day, specifically in the afternoon, when customers are not at home consuming energy. During this time, excess energy is stored in the customer’s utility grid until they need it. Most homeowners consume energy in the mornings and evenings when solar production is not at its peak – they can draw from their “banked” energy at this time instead of pulling from the utility. While the solar system is producing an excess of energy, homeowners can actually watch their meters run backward!
I have solar panels but haven‘t seen any effect on my bill. So much for net metering!
Let’s say you installed your panels and have yet to see any effect on your energy bill after 3 months. Why is that? Panels need sunlight to produce energy. This may seem obvious, but if installed in the winter, the panels have not yet had enough sunlight to produce significant energy due to the short and dark winter days. In the summer, you can expect your solar panels to overproduce energy, and your utility company “credits” this to your account. Wait a year or so to see a full picture of solar panel benefits—most SunPower panel owners “net” out even.
Is Net Metering killing jobs?
Just the opposite! net metering is increasing the demand for solar systems. This creates jobs for installers, electricians and manufacturing facilities that build the components of a solar system. The solar industry currently employs about 250,000 Americans. The largest reason for this is net metering policies which make it so attractive for homeowners to go solar.
Does Net Metering help utilities?
Some power utilities look at net metering as lost revenue opportunities. If customers can “bank” their own energy, how can we get them to buy electricity? However, net metering policies provide utilities with a smoother demand curve which puts let strain on the utility’s infrastructure. It also allows for the utilities to better manage their peak loads as customers help regulate their own energy usage.