What Is Net Metering and How Does It Work?

What is Net Metering?

How Does It Work?

If you’re interested in installing solar panels for your home, chances are you have been doing some serious research. Researching the benefits of solar, potential limitations, and encountering a ton of new information and terminology.

One of the terms you most likely came across during your research is the idea of “Net Metering.” Net Metering and how it works is essential for any solar owner, but it can sometimes be a confusing term to truly understand.

What is Net Metering?

Net Metering, also known as Net Energy Metering or NEM, is a utility billing system that credits solar energy system owners for the electricity they add to the grid. Think of it as an incentive program (much like getting a bonus at work) where there is an exchange between the solar system owner (AKA-you) and the utility company. Please note, the utility company is the entity that determines whether they use net metering, bilateral or (the horrors) basa -buy all, sell all.

If your utility company uses net metering, then they will apply a credit (or bonus) to your electric bill for each kilowatt-hour (kWh) of solar electricity you send to the grid. When your solar panels aren’t producing electricity, you can take electricity from the grid and use the applied credit if applicable – a monetary incentive program that will lower the overall cost of your electricity bill!

How Does Net Metering Work?

Now that you have an understanding of what Net Metering is, here is a step by step explanation of how it works:

  • A rooftop solar system generates the most electricity during the day when most people are at work and at school.
  • The excess electricity is exported to your electric utility’s grid.
  • When your system isn’t producing enough electricity, you can draw from the grid just as you did before you went solar.
  • This “back-and-forth” between your system and the grid ensures that your excess production will still be used and your shortages will be met.
  • The total electricity usage for the month is monitored and at the end of your billing cycle, you’re only responsible for the net energy consumption.
  • If the solar energy your system generated is more than what your home used that month, then your electric provider will credit your bill. A Solar Panel Bonus!

Requirements and Benefits

The main requirement of net metering is that your solar system has to be grid-tied. This means that it must be connected to the power company, to facilitate the transfer of energy from your solar system to the utility. However, that isn’t a big concern when you look at the numerous benefits:

  • Net metering helps you balance your solar electricity use.
  • Net metering can significantly reduce your monthly power bills.
  • The grid serves as a backup power system, eliminating the need for costly generators or batteries.
  • Net Metering helps reduce the amount of stress on the electric grid distribution system.

Final Thoughts

While Net Metering won’t give you more vacation time or match your 401K, it is an amazing incentive program offered by the utility company. A way to provide a potential solar system owner motivation to install solar panels and start realizing the potential saving. Want to learn more about installing solar panels?

Why Go Solar Now!

While it is “snow” joke to talk about the benefits of solar panels, we hope this article cleared up some potential questions that go along with owning solar panels during winter weather.

NC SOLAR NOW is North Carolina’s Most Trusted solar panel installer and embraces the philosophy that solar is for everyone! We’ll be by your side from your first free virtual consult through our warranty period and beyond.
Take our free solar analysis on our website, send us a message, or call us at 919-833-9096.

Want to Read More About Solar Topics?

Take a look at some of our other articles about solar energy.

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Are you still wondering if solar panels are right for you? Are you considering going green with your house but you’re concerned about the cost? Our team can walk you through any questions or concerns you have. Set up a no-obligation call with us, and we can explain all the benefits of solar power to your home (and to your bank account).
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