Net Metering: Everything A Homeowner need to Know
State and local laws, utility company policies, and other factors affect net metering. If you live in a state where NEM is available, you should be able to sell extra electricity to the utility company. Also, when you need grid electricity in case when your solar energy system in cold weather might not be able to supply all of your demands, you can get a credit to spend for it.
What is Net Metering?
Net metering is also known as net energy metering (or NEM). It is a process that allows homeowners to send extra energy generated by the solar system to the electrical grid. However, there is a common misconception that this process allows one to get paid for energy. That’s not exactly true. It’s unlikely that you will receive a check from the electric company if you provide them with electricity. Instead, when you use electricity, your electric meter will go forward. And it will get the balance when you send power back to the grid. As a result, the cost of electricity gets low or perhaps eliminated.
How does Net Energy metering work?
Net metering allows you to receive credit for the solar energy you send back to the grid. Also, it offsets the electricity cost you will purchase from the utility. It allows you to receive the full economic value of all the solar power your panels produce. Your monthly electric bill may also be eliminated if you have the best-fit PV Solar system in your home. Learn how to read your solar electric bill.
Solar PV systems send their excess power to the grid when they generate more electricity than a home needs. This is the situation when net metering is useful. Your electricity meter rotates backward, and your utility applies credit for the full retail value of electricity to your account when a net-metered system sends energy to the grid.
However, when your solar panels aren’t producing much energy during the night, you consume power from the grid. This usage causes your electric meter to spin once more. The phrase “net metering” refers to a billing method by which the utility calculates your final bill by balancing the electricity you use and sending it to the grid.
How do electricity bills work with Net Metering?
In general, most households generate extra electricity in the summer months and consume more electricity from the grid in the winter. Because these swings in output are pretty predictable, your utility won’t send you a monthly bill when you produce more than you need. Rather, during the summer you will accumulate more credits that you can use at night and in the winter when you need them. Even if you produce significantly more electricity than you use in some months and significantly less in others, a well-designed system can provide enough power to cover your whole electricity consumption for a year.
Do net metering credits carry over from month to month?
Depending on the utility, you can use your energy credits over from month to month in full-retail net metering programs. Therefore, if you produce more electricity than you consume in a given month, you can utilize the extra credits. These credits are to offset the electricity bill you need from the grid next month.
On average, during the summer, when the days are long and sunny, you will have extra credits. You can use these summer credits to lower your electrical bills during the gloomy winter months.
Is NEM available in all states and cities in the U.S.?
Out of the 50 states, 28 mandate full-retail net metering. While 18 states provide some alternate net metering tariffs or programs like solar buyback plans. Utility companies have been pushing to restrict such programs across the U.S. This is to minimize residential customers’ solar savings and boost their profit margins. In areas like Louisiana and South Carolina, utilities have been successful. Also, NEM reforms are even planned for California, the state that is most solar-friendly.
What are the challenges to NEM?
Despite the advantages, its implementation and regulations additionally offer certain obstacles. Making sure that solar power providers receive fair and transparent pay while preserving the utility companies’ financial stability and sustainability is one of the problems. Some utility companies contend that net metering pushes the cost of maintaining the infrastructure on non-solar users.
As net metering regulations vary from state to state, region to region, and jurisdiction to jurisdiction, coordinating the policies and incentives of these entities is another difficulty. While some jurisdictions have limits on the amount of net metering capacity, others have various rates, taxes, or structures.
If you’re interested in net metering, you must first confirm your eligibility and compliance with your utility provider and your state’s or municipality’s standards. A permit, interconnection agreement, or net metering contract may all need to be applied for. Additionally, you might need to abide by specific standards, codes, or inspections.
The second step is to install a solar power system that meets both your budget and your energy requirements. If you need assistance with the design, installation, or maintenance of your PV system, you should speak with a qualified solar installer or contractor. Third, you must keep an eye on and manage your net metering billing and performance.
Overall, with net metering, you can store all of the energy you generate from solar to utilize later from the grid, making it the best solar policy. Over time, it helps you save thousands of dollars on your solar panel installation. SolarSME is a local solar installer offering affordable and tailored solar solutions Get a FREE Quote for your solar savings!
