Net Metering for Solar Power System

So what makes installing solar power systems help people to save money? The answer is to that is quite simple: net metering.

What is net metering?

Maybe you don’t have a deep understanding towards net metering before you read this article. Simply speaking, net metering is a utility billing mechanism available in most states that offers a credit to residential and business customers who are making excess electricity with their solar power systems and sending it back to the grid. Net metering is one of the most popular solar incentives ever created. Unlike solar tax credits or rebates which provide valuable one-time benefits to lower the upfront costs of your solar power system, net metering delivers on-going dividends over the lifetime of your solar installation.

How does net metering work?

Generally speaking, solar power systems usually hit the maximum electricity production in the afternoon, when many people aren’t home using electricity. By contrast, home electricity use is typically higher in the mornings and evenings. Net metering helps you to account for these ups and downs in your daily electricity production and usage.

With net metering, extra electricity is fed into the electric grid when your system is producing more than you need. When this happens, your meter actually runs in reverse. When your system do not produce enough electricity, you can draw it from your utility just as you did before you went solar. This “back-and-forth” between your system and the grid ensures that your excess energy production will still be used and your shortages will be met. With net metering, the excess electricity your home produces covers the times when you don’t produce enough.

When your solar power system generates more electricity than you use over the course of a month, your utility bill will receive a credit based on the net number of kilowatt-hours you gave back to the grid. If you produce less electricity than you use in a given month, you must buy electricity from your utility to make up the difference. In these instances, you would pay for the electricity you use, minus any excess electricity your solar panels generated.

What’s more, your solar panels not only produce more electricity during the afternoon, but also have a higher electricity production in the hot summer (like we mentioned in the former article). Luckily, with net metering, all of that excess summer production can help offset your electricity bills in the winter.

There are many benefits of net metering, some of them are as follows:

The benefits of net metering

1、Giving users control over their utility bills

First and importantly, net metering can help solar users to save a lot of utility bills. Net metering allows them to generate their own electricity cleanly and efficiently. It can significantly reduce your monthly power bills. If you size your solar power system suitably, you may wipe out all of your energy use costs. This results in tens of thousands of dollars in savings over the service life of your solar power system.

2、Reducing strain on the electric grid

Net metering policies create a smoother demand curve for electricity and allow utilities to better manage their peak electricity loads. When your solar power system sends extra energy into the grid through net metering, the exported energy is used to serve nearby user’s loads. They can meet their own energy demands. Under the net metering, the solar power system is generating electricity near the point of consumption, there will be less demand and strain on the grid’s distribution and transmission infrastructure. Besides, it also minimizes energy loss that can happen through transmitting voltage over long distances from the power plant.

3、Shortening the payback period

Net metering can really speed up the payback period and also boost the ROI (return on investment) with the monetization of your excess solar energy. You are not only saving your money on your energy expenses by using less energy from the electric grid---your excess solar energy from your system serves as additional revenue to be used to lower future energy bills from the grid, which maximizes your solar investment. 

4、Saving the storage battery cost

Net metering makes sure that you can get the most out of your solar power systems. When your utility offers net metering, it means that you can use the electric grid as a “virtual” battery to store the economic value of your excess solar electricity. 

Without net metering, you may need to install a solar storage battery to store and use your extra energy production, which will cost you a couple thousand dollars. So with this mechanism, you can save the storage battery cost.

In conclusion, learning about the net metering and its working mechanism is important for people who are using solar or be ready to get solar.