Net Metering 101

net metering 101

Net Metering 101: What Is It And How Does It Work?

Sometimes you may find that your solar panels are overachievers, or you generally don’t use a lot of electricity. This doesn’t mean that all the extra electricity you generate and don’t use should go to waste. Instead, you can benefit yourself and others through net metering. This practice has a lot of benefits. It can even be beneficial for people with solar panels that don’t generate enough solar power to meet their electricity needs. Let’s take a deeper look into net metering and how it works.

What is Net Metering?

There are times when your solar panels generate excess power. Net metering awards you the opportunity to send that electricity to the grid and receive credits. For this to be possible, you need to have an agreement with your utility company.


This practice benefits both you and the utility company. It enables you to share the load with the power plants by extending their operation times. Utility companies can also generate more electricity this way without having to upgrade their infrastructure. Therefore, they will save a lot of money on upgrades and still meet their obligations to consumers.


You can use the credits you get from net metering to offset your utility bill. These credits are most useful during the night and when winter comes. These are times when you won’t be able to generate enough electricity for yourself. Simply put, net metering allows you to make money from the electricity you generate.

How Does Net Metering Work?

If you install a net-metered solar system, each time your system generates excess electricity, that power will go into the grid. This results in your electric meter running in reverse. During the night, on cloudy days, and in the winter, when you are using more power than your system can produce, your meter will start running forward. Then, when the utility company is billing you at the end of the month, they will use the net of what you contributed to the grid and what you withdrew from the grid. That is where the term net metering comes from.

Benefits of Net Metering

When you have a solar panel that can meet your home’s needs, you will be able to generate enough power to sustain yourself. However, solar energy generation is weather dependant. Therefore, there are certain months and seasons where your solar panel won’t meet your electricity needs.


For instance, you get more electricity during the sunnier summer months and less when you have shorter days in the winter. With net metering, you can navigate these seasonal variations by getting credited for the excess electricity you generate in summer, so you can use the credits in the winter months.


Below are some of the other benefits of net metering:


  • Energy not utilized during the month can be rolled over for use in the next month
  • Lower electricity bills
  • No need to install an expensive battery storage system
  • Reduces the load for electric grids,
  • Encourage customers to move towards renewable energy.

Using Net Metering to Save by Going Solar

Net metering essentially enables you to store every unit of energy you produce. You can then use this electricity at a later date when you need it. This can help you save tens of thousands of dollars by offsetting your need for electricity from the grid. This is by far the most efficient saving strategy when you have a solar system.


Most people think that bad weather will cancel the savings you get by having a solar system. However, that is not true. With net metering, you can cancel the impact of bad weather by taking advantage of the times you generate excess electricity.


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