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What is net metering and how does it work?

What you need to know about net metering
Net metering

When looking for solar, there are many industry phrases to be aware of, and net metering is one of the most crucial.

The billing method known as net metering, sometimes referred to as NEM or net energy metering, provides an answer to the age-old query, "how does solar work, if the sun is not shining?".

It's critical to comprehend net metering, how it functions, and whether it's offered in your area if you're considering going solar.

What is Net Metering?

Net metering, also known as net energy metering or NEM, is a utility rate program that mandates that your electric company buy the extra solar energy that your solar panels generate at the full retail rate of power.

In other words, if your solar energy system generates more electricity than what you need for your home, the extra energy is transmitted to the power grid and your utility company pays you for it. Rooftop solar panels are an excellent way to reduce your energy costs because of net metering. In actuality, states with the finest net metering regulations are the best for solar installation rather than those with the most sunshine.

How does Net Metering Work?

Let's say you have a solar panel installation and live in a region with a net metering program. Your electric meter is set to go backwards when your photovoltaic system generates more electricity than you are using at any given time of the day. When your energy consumption exceeds the output of your solar panels, whether it's at night or on overcast days, you'll draw power from the grid and advance your meter. You will be charged the difference between what you provide to the grid and what you pull from the grid at the end of the month or year, which is known as "net metering".

You can generate enough electricity with a solar energy system of the right size to cover your home's annual electrical needs. The quantity of electricity your solar panels generate will fluctuate throughout the year, though, with summer months having more sunshine and winter months having less because the sun is lower in the sky and sets earlier. By giving you credit for the extra electricity your solar panels generate so you may utilize it later, net metering enables you to take into account these seasonal variations in solar production.

How does Net Metering Work?
How does Net Metering Work?

Benefits of Net Metering and Energy Metering

A great strategy to encourage the use of sustainable energy is through net metering. It provides both consumers and the environment with the following advantages:

  • It eliminates the need for a storage battery: Owners of solar panels do not need to spend money on batteries to store additional power. The metering energy inverter makes it simple to feed the grid with extra electricity. People can use power whenever they need it without having to pay extra.

  • It creates financial credit: For those who have a large solar panel installation, metering energy is a terrific opportunity to make a passive income. By producing several units of power, users can earn money from the state government or the electric department or credit for future use.

  • It requires little upkeep: A practical choice for using electricity is net metering. Additionally, compared to a non-grid system, the maintenance cost is lower when excess power is sent to the electrical grid.

Is Net Metering Worth it?

Net metering is certainly worthwhile for households who have solar panels in terms of financial savings and helping the transition to renewable energy. The adoption of rooftop solar has increased significantly thanks to net metering, which results in:

  • more control over electricity costs

  • lower-cost, cleaner electricity

  • less pressure on the nearby grid

  • investments and employment in clean energy

In fact, there is a claim that fundamental net metering policies favor solar owners too much given how cheap solar energy is, and some policies are currently being changed.

Going solar sooner rather than later may be worthwhile if you live in a state that is thinking about revising its net metering regulations, like California or New York, in order to be grandfathered in the current structure.

So don't wait to go solar if you want to benefit from the existing favorable net metering laws. For information on anything from how many solar panels you'll need to how much they cost, send us a quote.


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