What is Net Metering for Solar?

Net metering is a method used by many utilities to compensate your solar system for overproduction of electricity (kWh) over a period of time.
Technically, net metering is not a “sale” of solar power to the utility. Instead of money, you are compensated with energy credits that you can use to offset your electricity bill.
How does net metering work?

On a sunny day, your solar system produces energy. Some of this energy is used immediately by your home, farm or business. However, depending on your electricity usage and the amount of energy your system produces, on a sunny day the system may produce more electricity than you use.
In a grid-connected system, the excess electricity is sent back to the grid through the meter. In return, the utility company will give you a one-for-one credit for the electricity you ‘upload’ to the grid.

If you use electricity when your solar system is not generating power, such as at night, you are buying electricity from the utility company. You can use these credits to “net” your meter without paying for electricity.
Net metering usually requires the utility company to credit your account at the retail price of electricity (i.e. the price at which you bought the electricity). This makes it easier to offset more of your electricity with solar power. It essentially uses the grid as a free form of energy storage. This allows you to use 100% of the free electricity generated by your solar system, no matter how bright the sun is shining.
What is Net Metering
In addition to the financial benefits, net metering encourages the adoption of solar energy systems by making them more economically viable for homeowners and businesses. By receiving credit for excess electricity, solar system owners can significantly reduce their monthly energy bills and may even see a return on their investment over time.
 
Net metering policies vary from state to state and even within states or territories. Some jurisdictions have specific limits on the size of solar systems that can participate in net metering, while others may have time-of-use or demand-based net metering arrangements. It is important for solar system owners to familiarise themselves with the specific net metering policies in their jurisdictions in order to take full advantage of the benefits.
In addition, net metering not only benefits the individual solar system owner, but also contributes to the overall stability and efficiency of the grid. Net metering helps balance fluctuations in electricity supply and demand by allowing excess energy to be fed back into the grid. It reduces the strain on the grid during periods of peak energy demand and even helps to improve the overall resilience and reliability of the electricity system.
It’s also worth noting that net metering is not limited to solar energy systems alone. Some regions have expanded net metering programs to include other types of renewable energy sources such as wind, geothermal, and biomass.
Conclusion
Overall, net metering plays a critical role in encouraging the adoption of solar energy and supporting the continued growth of renewable energy. It encourages homeowners and businesses to invest in solar energy systems, reducing dependence on fossil fuels and contributing to a more sustainable, cleaner energy future.