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What is Net Metering and is it Worth the Switch?

With an evolving energy landscape, understanding net metering is beneficial and key. This knowledge holds the power to revolutionize how you interact with your energy consumption and production. 

Net metering enables you to seamlessly integrate renewable energy sources like solar power into your life by allowing you to measure, store, and even sell excess energy back to the grid. In other words, it’s a gateway to sustainable living and substantial savings on your energy bills. 

Join us in uncovering the significance and advantages of net metering for a greener and more economically efficient energy future.

Understanding What Is Net Metering

Net metering is a billing arrangement that enables individuals and businesses with renewable energy systems, such as solar panels, to manage their electricity usage efficiently. It allows excess energy generated by these systems to be fed back into the grid, essentially running the electricity meter backward. This surplus energy is credited, reducing future electricity bills.

An Overview Of How Net Metering Works

Net metering allows individuals and businesses with renewable energy systems, like solar panels, to integrate into the grid seamlessly. When these systems generate excess electricity, it flows back to the grid, effectively reversing the electricity meter. 

This surplus power is credited to the owner’s account, reducing future energy bills. During low or no generation periods, electricity is drawn from the grid as usual. 

Net metering thus facilitates a dynamic exchange between consumers and utilities, encouraging the efficient use of renewable energy, reducing reliance on fossil fuels, and supporting a sustainable energy ecosystem.

The Three Elements That Differentiate Between Net Metering Program

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Credit Rollover (Monthly Vs. Annual Vs. Indefinite)

Some programs allow excess energy credits to roll over every month, meaning any surplus energy generated in a particular month can offset the following month’s consumption. 

Others have an annual rollover, which means credits can be carried forward for a full year. The most flexible programs offer indefinite rollover, allowing you to accumulate and use credits indefinitely. Choosing these options impacts how effectively you can leverage surplus energy and reduce your overall energy costs.

Value Of Credits

In some regions, credits are equal in value to the retail rate, meaning each surplus kilowatt-hour generated is credited at the same rate you pay for electricity. 

In other cases, the credit value may be lower, which can affect the financial benefits of net metering. Understand the credit value to calculate your potential savings and return on investment.

Time Of Use Rates

TOU rates vary the cost of electricity depending on the time of day, with peak and off-peak rates. Some net metering programs may credit surplus energy based on these rate fluctuations, which can affect the overall financial benefits.

How To Participate In Net Metering

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Participating in net metering is a straightforward process that allows you to harness the benefits of renewable energy while reducing your electricity bills. Here’s a concise guide on how to get started:

Install a Renewable Energy System

First, you must invest in a renewable energy system, such as solar panels, wind turbines, or other eligible sources. Ensure the system is correctly sized to meet your energy needs and complies with local regulations.

Contact Your Utility Company

Contact your local utility company to inquire about their net metering program. They will provide information on eligibility, application procedures, and specific requirements or agreements.

Install a Bi-Directional Meter

Your utility company will install a bi-directional meter, also known as a net meter, to measure the electricity you consume and generate. This meter ensures accurate tracking of surplus energy fed back into the grid.

Generate and Consume Electricity

With your renewable energy system in place, you’ll begin generating own electricity. Any surplus energy you produce during sunny or windy periods is sent back to the grid and credited to your account.

Monitor Your Net Metering Credits

Keep track of your net metering credits through your utility’s billing statements or online portal. These credits offset your future electricity bills, reducing your overall costs.

Enjoy Savings and Environmental Benefits

Over time, you’ll notice reduced electricity bills; in some cases, you may even earn credits or compensation for your surplus energy. Not only does net metering save you money, but it also contributes to a cleaner and more sustainable energy grid

Advantages Of Net Metering

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Converts Solar Generation Into Power Bill Savings

Net metering allows homeowners with solar panels to convert excess electricity into credits on their power bills. This reduces or eliminates their monthly electricity expenses, resulting in substantial long-term savings.

Makes Home Solar Energy System More Affordable

Net metering incentivizes the installation of home solar energy systems by ensuring a return on investment. The ability to earn credits or reduce bills enhances the financial viability of these systems, making them more accessible to a broader range of consumers.

Reduces Transmission Costs for Utility Companies

Net metering reduces the need for utilities to transmit electricity over long distances. When consumers generate electricity locally, there’s less strain on the grid, leading to cost savings for utility companies, which can ultimately benefit all customers through stabilized or reduced rates.

Promotes Renewable Energy Adoption

Net metering encourages the adoption of renewable energy sources like solar, contributing to a cleaner and more sustainable energy mix. Solar panels produce clean energy, reducing greenhouse gas emissions and combating climate change to foster a greener future.

Enhances Grid Resilience

Distributed energy generation through net metering enhances the resilience of the electric grid. In case of power outages or natural disasters, homes and businesses with renewable energy systems can continue generating electricity, reducing reliance on centralized power sources and increasing overall grid reliability.

Some Of The Limitations Of Net Metering

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Some Utilities Offer Reduced Tariffs

In certain regions, utilities may offer reduced tariffs or credit values for surplus energy fed back into the grid. This can diminish the financial benefits of net metering, as the credits you receive may be lower than what you pay for electricity.

Credits Cannot Exceed Your Annual Consumption

Net metering programs typically limit the credits you can accumulate. In many cases, credits cannot exceed your annual electricity consumption. Any surplus energy generated beyond your yearly usage cannot be fully credited or monetized, potentially underutilizing your renewable energy system’s capacity.

Net Metering Availability

Some regions may have limited or no net metering programs, making it challenging for residents to benefit from this arrangement. Additionally, policies and regulations can change over time, affecting the accessibility and terms of net metering.

Alternatives Of Net Metering Programs

Net Billing

With net billing, excess energy generated by a renewable energy system is sent to the grid, but instead of receiving credits, you are compensated at a predetermined rate for the surplus electricity. This rate may be different from the retail rate you pay for electricity, impacting the financial benefits of your renewable energy system.

Buy-All, Sell-All

The buy-all, sell-all approach involves selling all the electricity your renewable energy system generates to the utility company and then purchasing all the electricity you consume. This simplifies the process but may result in different rates for buying and selling electricity, affecting the overall cost savings.

Solar Self-Consumption

Solar self-consumption focuses on using your solar panels’ energy directly within your home or business rather than returning excess energy to the grid. It aims to maximize on-site energy usage and reduce dependence on the grid. While this approach doesn’t offer credits or compensation, it can significantly save your electricity bills by offsetting your consumption with solar-generated power.

Go Solar And Save With Net Metering

Net metering is a game-changer in the world of energy management. It empowers solar customers and businesses to embrace renewable energy sources like solar power, turning consumers into prosumers who can generate, store, and share clean electricity. 

By understanding net metering, you can reduce your energy bills and play a pivotal role in creating a more sustainable and resilient energy grid. It’s a win-win scenario that benefits both your wallet and the planet. Go solar today with Ethical Energy Solar!


Why Does Solar Net Metering Matter?

Solar net metering matters because it transforms how we interact with energy and promotes the adoption of renewable sources like solar power.

With net metering, excess electricity generated by your solar panels is fed back into the grid, effectively spinning your electricity meter backward. This allows you to offset your energy consumption and sometimes earn credits or monetary compensation for the surplus energy you contribute. It’s a financial incentive that makes solar power more attractive, encourages energy efficiency, and accelerates the transition to cleaner, sustainable energy solutions.

Can My Net Metering Credits Expire?

The expiration of net metering credits varies by location and utility company. In some areas, credits may have an expiry date, typically annually. However, many states have policies that allow you to roll over unused credits from month to month or year to year, ensuring you can use them when needed. 

Does Net Metering Only Apply To Solar Power System?

No, net metering is not exclusive to only a solar system. While it is most commonly associated with solar, it can apply to various renewable energy systems, including wind, hydro, and biomass. The key requirement is that the system generates excess electricity to be fed back into the grid, allowing for credits or compensation for the surplus energy produced.

What Types Of Renewable Energy Systems Are Eligible For Net Metering?

The eligibility of renewable energy systems for net metering depends on local regulations and utility policies. In general, solar photovoltaic (PV) systems, wind turbines, small-scale hydroelectric systems, and biomass generators are eligible for net metering programs.

Can I Make Money With Net Metering?

While net energy metering primarily focuses on reducing energy costs rather than generating income, it can provide financial benefits. You can save money over time by offsetting your electricity bills and potentially earning credits or compensation for surplus energy. The extent of these savings depends on factors like your energy consumption, system size, local utility rates, and net metering policies.