What You Need To Know About Net Metering

What You Need To Know About Net Metering

Net metering is a way for people with solar panels in their homes to send the excess energy they produce back to the power grid. When homeowners create more energy than they need, their meter will run backward, crediting them for the energy they sent back to the grid. This process allows homeowners to get credit for the electricity they generate and use it later when they need it.

Net metering can benefit homeowners, utilities, and the environment. Learn more about how net metering works and how you can take advantage of it in your home.

Basic Concepts About Net Metering

Net metering is a program that allows consumers who generate their electricity, from sources such as solar panels or wind turbines, to be credited for the energy they produce and put back into the grid.

Through this program, businesses, municipalities, and homeowners alike can be compensated for the excess energy that their clean energy systems generate when energy production exceeds consumption. This program helps to create a balanced energy system by allowing users to both contribute and draw on clean electricity as needed.

With net metering arrangements, customers can expect to realize immediate savings depending on how much additional power they put back into the grid. For those looking to make an eco-friendly investment in renewable energy generation while still offsetting some of the costs associated with traditional power, net metering provides an intriguing option!

How Net Metering Differs From Buyback Program

Net metering and buyback programs are two similar yet distinct types of solar energy billing systems that have increasingly gained popularity throughout the U.S.

Both structures allow homeowners that generate electricity from their solar panel arrays to sell back excess energy generated for credit on their electricity bill; however, net metering and buyback programs differ in how this credit is allocated.

With a net metering program, customers are credited at a retail rate for the power they send to the grid; meaning the homeowner is receiving the same amount of money that it would cost them to purchase from their electricity service provider.

In contrast, buyers under a buyback program must accept only wholesale rates for credits on their electricity bills, providing homeowners with less return for sending back energy to the power grid. Ultimately, both options provide users with considerable savings on electricity costs while also helping to make green technology more accessible – so it’s important to consider whether net metering or buyback programs best suit your needs.

How Net Metering Benefits A Consumer

Net metering is a helpful tool for promoting energy sustainability and cutting energy costs. It allows renewable energy system owners to receive credit on the electricity used on their grid-tied electricity bill.

This common practice has helped millions of users with solar energy production save money while helping conserve energy sources. For example, customers can purchase 10,000 kilowatt-hours of solar power and use 5,000 kilowatt-hours during the billing cycle, but still receive as if they used 10,000 kilowatt-hours.

Net metering even helps owners take advantage of the time-of-use rates that add more competition to the market. As such, this regulated system provides users with more flexibility by providing access to low-cost solutions when consuming or generating electricity.

Disadvantages of Net Metering

While net metering can certainly offer clear advantages in terms of reducing energy costs and access to clean, renewable energy sources, it also has certain disadvantages.

One disadvantage of net metering is that it can potentially disrupt the existing energy grid. When large volumes of renewable energy enter the market due to net metering, it can destabilize long-term investments in coal or nuclear power plants, which are typically utilized by utilities for large-scale electricity production.

On top of that, net metering can be expensive for those not participating in these programs since the utility company still needs to invest resources into maintaining an infrastructure that can support any influx of renewable energy.

Finally, some believe that net metering may be unfair to consumers as those with rooftop solar gain financial benefits at the expense of those without renewables installed on their property.

How Net Metering Works With Electricity Bills

Any excess power generated can be supplied back into the electricity grid and credited to the household’s electricity bill. Whenever this occurs, the excess amount will first reduce any amount due on a consumer’s account before it begins to accrue credits.

Homeowners who install renewable energy systems are not going to be able to generate all the power they need 24/7, which means they remain connected and supported by their electrical power provider. Through net metering, households can receive credit for their surplus energy production and in turn benefit from lower electricity bills.

This method has proven beneficial for both residential customers and electrical service providers alike by reducing greenhouse gas emissions, stimulating economic development, and promoting energy efficiency.


Net metering is an important policy that helps to incentivize the growth of renewables while also ensuring that everyone has access to clean, affordable electricity. With more and more people generating their power from solar and wind, net metering policies must remain in place. Have you been able to take advantage of your state’s net metering policy?