Net Metering – How It Works and What You Should Know
Sep 27, 2022
by Tara McDermott
Solar power can help reduce energy bills, increase resiliency, and allow homeowners to lower their carbon footprint. One concern a lot of people have before going solar is what happens when the sun isn’t shining, like at night or during the winter? That’s where net metering comes in. Net metering allows homeowners to power their homes using the sun.
What is net metering?
After you install solar panels at your home, some utility companies allow you to participate in net metering. During sunny days, your system may produce more energy than your home will need. Basically, net metering allows you to send this excess energy back to the grid to use later when your system isn’t producing enough energy, like at night or during the winter.
How does net metering work?
Home solar panels are going to produce the most energy during the day. This is also typically when homes are using the least amount of energy. This excess energy is automatically sent back to the grid. Your meter will “spin backwards”, and you will receive a credit for the full retail value of the energy your system produces.
During times when your system isn’t producing enough energy to cover your needs, like at night, your house will use energy from the grid, spinning your meter forward. Your utility company will net the difference before your next billing period. Because of net metering, the difference can come to $0, and homeowners can typically see their entire energy bill covered by solar.
Who benefits from net metering? What are all of the benefits that it provides?
Net metering of course benefits homeowners that have solar installed. It allows them to lower electricity bills and save money, while also reducing their carbon footprint and reliance on traditional energy. This enables owners to utilize energy produced by their system at any time during the year, not just during spring or summer when the sun is at its strongest.
Entire communities can benefit from net metering. Homeowners with solar aren’t using energy from the grid, but their own self-generated electricity. The excess energy being sent to the grid can also be used by non-solar homes, which reduces pressure on the grid and utility power plants.
Net metering also helps communities by providing jobs. An estimated 230,000 American workers are employed in the solar field. Encouraging net metering increases demand for solar, creating more jobs for solar engineers, installers, technicians, and many more positions.
How are electricity bills impacted by this?
Home solar can greatly reduce your electricity bill each month. After installation, you could pay as little as $12 each month, which is the connectivity fee charged by PSEGLI or ConEd to keep your house tied to the grid. With net metering, you are able to guarantee that your home’s electric bills will remain low. This allows you to save each month, even during months when the sun isn’t as strong.
Should I switch to net metering?
If you already have solar installed, net metering can help you keep electric bills low, even when the sun isn’t shining.
Due to inflation and rising energy prices, homeowners are looking for a solution to lower bills. Net metering allows you to capture every bit of energy that your system produces. Enrolling in a program can help further reduce your energy bill. Over the course of your system’s 25 year lifetime, you can expect to save over $100,000 on home electricity bills. The best part? The cost of solar is fixed. This means that once your system is installed and paid for, you will never owe another dime.
It’s easy to check to confirm that you are enrolled in a net metering program. The first thing to do is examine your meter to see if there is a net metering sticker on it. You can also check to see if the meter number is different from the number usually listed on your old electric bill. Your kWh readings should also be significantly lower than your pre-solar bills.
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About the Author
Tara represents EmPower Solar as the Chair of the Long Island Solar & Storage Alliance where she is the government liaison for policy issues related to solar and energy storage. In 2018, Tara was named one of the Top 50 Women in Business by the Long Island Business News. She was also inducted into the Social Justice Distinguished Scholar Academy for her work in environmental justice issues in collaboration with Farmingdale State College.