How Net Metering Works for a Solar Panel Installations

Solar panels on house

If your home or business is equipped with a solar panel installation, you may be eligible for net metering. Net metering has become increasingly common in recent years. Statistics show that nearly 3 million customers in the United States take advantage of it. With net metering, you can receive energy credits for excess energy produced by your solar panels.

Overview of Net Metering

Net metering is a billing arrangement between a homeowner or business owner with a solar panel installation and a utility company. It allows homeowners and business owners to sell some of their excess, unused energy to a utility company. Utility companies don’t pay cash for this excess energy. Rather, they compensate homeowners and business owners in the form of credits.

How Net Metering Works

When you sign up for net metering, the utility company will automatically track your energy usage and energy production. It’s known as “net metering” because utility companies only charge for “net usage.” If your energy production exceeds your energy usage, you’ll receive a credit that carries over to the following month.

Most solar panel installations are tied to the grid. This is done primarily for safety reasons. If an electrician needs to work on a house, he or she must be able to disconnect the power to it. Because they are tied to the grid, many utility companies offer net metering to their customers.

Benefits of Net Metering

Net metering will allow you to maximize the value of your solar panel installation. Even if your solar panels produce more energy than what your home or business requires, it won’t go to waste. The excess energy will be injected into the utility grid. The utility company, of course, will compensate you for this excess energy in the form of credits.

Net metering is easy to set up. You don’t need a complex battery system to take advantage of it. With net metering, excess energy isn’t stored locally; it’s injected into the utility grid where it’s distributed to other homeowners and business owners.

You don’t have to worry about tracking your energy usage or energy production. The utility company will track this data automatically. It will compare your utility usage to your energy production, and the utility company will provide you with bill credits automatically.

It’s important to note that net metering isn’t available in all states, nor is it offered by all utility companies. If you have a solar panel installation, though, you may want to inquire about net metering with your utility provider.

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