What is Net Metering?
Net metering credits solar customers for the excess energy they produce.
Solar and the Utility Companies
From the beginning of mankind, we’ve been getting sunburns, so we’ve always known something was up with the Sun. But it wasn’t until 1839, when 19-year-old Edmund Becquerel discovered the photovoltaic effect, and for the next 100 years we started developing what has become today’s solar technology.
Over the same time, Edison, Tesla and others were duking it out over how to harness and distribute electricity. Eventually the idea of power plants, and utility companies were established creating an infrastructure of energy distribution for our individual houses. Meanwhile, solar panels and technology developed. So we created a way for houses to produce electricity and we realized, wouldn’t it be amazing if we could connect to the utility grid and start distributing energy.
Renewable energy systems allow homeowners to generate their own power and sell it back to their state or local public utility companies. However, in order for this to happen net metering and similar programs had to be developed to support customers tying into the the grid. We have created a way for the common household to tie into the utility grid and a system to both keep track of that energy being produced and pay homeowners for the excess power their pv system makes.
What is Net Metering?
Net energy metering is a system that credits homeowners for the excess energy they contribute to the grid. It’s called “net metering” because as it was developed it was intended to give solar customers a net value for the energy they produce compared to the price they buy energy from the utility company. This system allows solar owners to “bank” credits for use during peak months on a net metering program. It is a key part of owning a Rooftop Solar system, and it is an important part of a sustainable grid. The net energy that you produce offsets your year-round changing energy needs. For instance, net metering in place like Phoenix, homeowners use a LOT of energy in the summer when their AC units are cranking. In the winter though their energy needs are very low. Net metering allows homeowners to overproduce in the winter for those big summer bills. Because energy needs fluctuate, it is important to consider how the electric company credits you year-round.
Net Metering: How it works
Various utility companies reward homeowners differently for the solar energy they produce. It is important to understand how that energy is valued. A net meter (often referred to as a “solar meter” or “smart meter”) provides information to the utility to allow them to track the difference between electricity consumed by the household and electricity generated.
You currently have an electric utility meter attached to your home, and it may be analog or digital. In either case, your existing meter will be changed out with a “net meter,” which can measure bidirectionally the amount of power being used by the house or being produced by the house. The net meter gives you a credit for any excess power you produce, spinning your meter backwards (figuratively, the net meter is digital). That credit is stored on your utility account, like a bank account, and you are making either deposits or withdrawals at all times. A net meter provides information to the utility to allow them to track the difference between electricity consumed by the household and electricity generated.
Customers with net metering will see their meters move backward. The excess energy produced is then used by neighbors in the area, while the excess savings go to the homeowner. Monthly solar plans offer a comparison between a locked in solar rate and an always increasing electric bill. By owning the solar system, a homeowner gets full offset, as well as energy independence from the electric company. The billing system a utility uses for solar homes is also important because the more solar homes are on the grid, the more sustainable and diverse it becomes.
Find out if solar makes sense for you
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