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What Is Net Metering, and How Does it Work?

Anyone who’s looked into solar energy likely has run across the term net metering. This term describes a billing mechanism that allows you to store/bank unused solar energy on the local power grid and later reclaim its value in the form of “free” energy when needed.


Solar panels can generate more electricity during the day than in the evening, when most homes consume the bulk of their daily electricity. With net metering, you’re credited for any excess energy you produce. That means when night falls, you pull from your grid-stored energy rather than pay your utility company to power your home.

Most states require utilities to participate in net metering

According to the Solar Energy Industries Association (SEIA), 38 U.S. states plus Washington D.C. and three U.S. territories have laws in place mandating that certain utilities participate in net metering. Of the remaining states, two have no laws but utility companies may voluntarily participate. Seven states and one territory have “generation compensation rules” other
than net metering.

The bottom line for users of net metering is none of the power their solar panels generate will be lost, which refutes the misconception that solar energy is only available while it’s being produced.

Jobs: another benefit

States with net metering programs and those where utility companies offer related incentives work to stir up the demand for residential and commercial solar systems. This results in more jobs for installers, manufacturers, electricians and others. On the SEIA net metering web page, the association writes:

“Today, the solar industry employs more than 250,000 American workers in large
part due to strong state net metering policies which have allowed the solar industry
to thrive.”

Of course, net metering is just one of many reasons people switch to solar. Other reasons include significant tax breaks, immediate returns on your investment, increased home value and the ability to distance yourself financially from the grid as you take control of your own
electrical needs.


Download our eBook, The True Cost of Solar, to learn what solar energy really costs and how much your own solar installation could save you today! 


Categories: All Energy Solar, Financial
Posted on December 05, 2018