What Is Net Metering & How Does it Work?

As you look into getting a solar power system installed for your home, you’re likely to hear the term net metering come up a lot. For many people, this term comes up before they know what it is. Net metering is actually a big part of what allows solar power to become such an attractive alternative power source for many people. To understand what net metering is, let’s first understand the problem it solves. 

When Solar Generates Power

Solar generates power when the sun is brightest. This completely obvious statement has a downside that’s not so obvious to everyone. When the sun is at its brightest, you are likely at work and if you are at your home, the lights are most likley off. The peak power usage of the average household does not correspond with the peak power output of a solar panel installation. This presents a potential problem for solar customers. Having more power than you need during the day, and not enough power at night, makes your solar installation far less efficient.

But that’s not all. During the summer months, the sun is out for up to 15 hours per day in Western New York. This is great, because those solar panels are soaking up those energy generating rays. During the winter months however, the sun has gone down before you even start your drive home from work. In the winter, the problem of generating electricity during the wrong time of the day is worse and you are relying on the electric company for power more often.

Without a costly battery system to store the power, you could be wasting a lot of the electricity that your new system is generating. Fortunately for solar customers, electricity has value! The value of that electricity is where net metering comes in to save the day! 

How Net Metering Helps

Whenever you have something of value that you don’t need, it’s a good idea to find someone who does need it. That’s exactly what net metering allows you to do with the excess solar energy you generate. By feeding the electricity that you don’t use to the electric company, you are able to build up credits that can be used when you do need the electricity.

In a sense, net metering allows the electric company to become your battery.  When your utility bill comes, rather than paying for all of the electricity they provided to you, you’ll only pay for the difference between what they gave you and you gave them. In other words, you are paying for your net electricity usage rather than your gross electricity usage, hence the name.

How much credit you get for the electricity you send to the power company depends on the type of net metering offered in your state. Thankfully, residents of New York enjoy full-retail net metering, which means you’ll get the full retail value of the electricity you send into the grid. With full-retail net metering and ideal conditions, it’s possible for a solar installation to reduce a homeowners electric bill to zero for part, or all, of the year. In some states, utility companies are allowed to pay less for net metering, and some states have completely different systems in place. If you’re not in New York, check the regulations for your state.

The availability of net metering is one of many factors that can determine whether solar is the right option for you. If you’re looking to move towards a more environmentally friendly energy source, or just want to save some money on your electric bill, contact us today. Our team of experts will be glad to help you decide if solar is right for you.