Net metering allows residential and commercial customers who generate their own electricity from solar power to feed electricity they do not use back into the grid. Many states have passed net metering laws. In other states, utilities may offer net metering programs voluntarily or as a result of regulatory decisions. Differences between states' legislation and implementation mean that the benefits of net metering can vary widely for solar customers in different areas of the country.
What Is Net Metering?
Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a PV system on the home's rooftop, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods where the home's electricity use exceeds the system's output. Customers are only billed for their "net" energy use. On average, only 20-40% of a solar energy system’s output ever goes into the grid. Exported solar electricity serves nearby customers’ loads.
Find out what net metering is available from your utility and see what effect this has on the return you will get by installing a solar power system.
This digital meter runs in both directions to accommodate electricity generated at this customer’s home. A 4 kilowatt PV system on a home in this area would offset around 4911 kilowatt hours of electricity each calendar year, saving the homeowner over $380 on their utility bill.
(Source – NREL PV Watts, EIA)