What Is Net Metering? Learn All About This Solar Term

What is net metering? – Forbes

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If you are considering using solar energy to power your home, the environmental benefits and long-term cost savings are good incentives. But, as you delve deeper into solar energy, you may find another fun advantage of using solar panels: With net metering, homeowners may be able to sell the unused energy, generated by their panels, to the utility company. This can help offset the cost of installing solar panels and can reduce your monthly utility bills.

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Net metering policies vary based on state and local regulations as well as utility company policies. If your home is located in an area with a net metering program, you should be able to sell the excess electricity to the utility company during peak solar times. Then you can get credit to use if you need grid-based electricity, for example during the dark winter months when the solar system doesn’t fully cover your electricity needs.

What is net metering?

Also known as net energy metering (or NEM), net metering is a way for people who especially own solar panels to give excess power to the electric grid. This can reduce the demand for the electrical grid, extend the environmental benefits of solar energy to more people and save the solar panel owner money.

Net metering allows you to use underutilized solar energy. While solar panel batteries allow owners to save energy until they need to use it, net metering allows the owner to share energy with the community.

One of the misconceptions about net metering is that you can get paid for energy. This is not quite the case: if you send the power to the electric company, they are unlikely to pay you with a check. Instead, the electricity meter will run backwards when you send electricity back to the grid and forwards when you use up electricity. This results in significantly lower or non-existent electricity bills.

How does net metering work?

To use net metering, you must be connected to the network – this is the case for The majority of solar energy users. This is because even with a highly efficient solar power system, the night hours, cloudy days and dark winter months, mean that your system will not be able to generate electricity continuously. During these times, you will likely need to draw electricity from the grid.

But, using net metering, you can sell excess electricity to the grid during those optimal times for power generation. Then you are only charged for the net amount of electricity your home uses. Consider this rudimentary example:

The rate of electricity sent to the network during daylight hours: 10 bucks
The price of electricity used from the network at night: $12
Today’s bill: 2 dollars

How to get started with net metering

If you’re interested in using net metering to lower your utility bills, the first step is to determine if you live in an area that supports net metering — and there’s a good chance that. according to Solar Reviews, net metering is required in 38 states plus Washington, DC. And even in states that don’t mandate net metering, some major utility companies still offer the option to solar power users.

If you want to know your community’s policies around net metering, reach out to your local solar panel installer and contact your utility company to confirm the details of their program. When the solar panels are in place and connected to the grid, starting net metering should be completely smooth.

Pros of net metering

Perhaps the biggest benefit of net metering is the potential for cost savings for homeowners who use solar panels. But there are certainly other advantages, such as:

Reduce your demand on the network

When you contribute solar energy back to the grid, that’s less than it needs to be drawn from non-renewable energy sources. It can make the local network more stable and environmentally friendly. Furthermore, because energy is generated locally, you help the environment even more by reducing the carbon footprint that comes with moving non-renewable energy sources into the community from elsewhere.

Increase your control over your utility bills

As you become aware of the energy you are using, you may become more aware of it. Good oversight of electricity on your part can help the environment as well as reduce utility bills.

Reduce your payback period

Net metering programs make the prospect of investing in a solar panel system more attractive to homeowners because it can significantly reduce monthly bills. As a result, you should be able to recoup the initial investment in solar panels much sooner than if you weren’t taking advantage of the net metering program. For example, the average payback period for standard residential solar panels in New Jersey is four to five years; In contrast, the payback period in a case without net metering policies can be greater than 10 years.

Cons of net metering

Network connection required

Since net metering is based on a connection to the utility company, and is paid with credit rather than cash, you won’t be a candidate for net metering if you’re completely off grid. In this case, you will need to invest in a solar battery to keep your excess power especially for use at night or other times when the system is not generating electricity.

Not available everywhere

Although the majority of states currently mandate net metering, some do not. Before assuming you can use net metering, check your local regulations, consult a solar installer and confirm the process with your utility provider. Unfortunately, there can be a downturn with net metering from some utility companies because it can reduce their profits.

You don’t get paid

This is something worth repeating because it is a common misconception in net metering. However, unless you invest in a solar battery, you will need to use power from the grid on occasion. So, while you may not get money depositing into your bank account from net metering, you won’t have to take much from that bank account to pay the bills.

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