Net metering is one of the most valuable benefits for solar homeowners. It lets you send excess electricity from your panels to the grid and receive credits that reduce your bill. Understanding how it works helps you maximize your solar investment and plan your energy usage.
What Is Net Metering?
Net metering is a billing arrangement where your utility credits you for excess solar electricity you export to the grid. When your panels produce more than you use—on sunny afternoons, for example—the surplus flows to the grid. Your meter runs backward, and you earn credits. At night or on cloudy days, you draw from the grid and use those credits.
How Credits Work
Credits are typically 1:1—one kWh exported equals one kWh of credit. In some regions, credits are valued at the retail rate (what you pay per kWh). In others, they may be valued at a lower "avoided cost" rate. Check your utility's net metering policy to understand your credit structure.
- Excess solar production flows to the grid
- You receive credits on your bill
- Credits offset consumption when the sun isn't shining
- Unused credits may roll over or expire—policies vary
Annual True-Up
Many utilities use an annual "true-up" period. Throughout the year, you accumulate credits in summer and use them in winter. At the end of the 12-month cycle, any remaining credits may be paid out at a wholesale rate, expire, or roll over depending on your state and utility.
Maximizing Net Metering Benefits
To get the most from net metering, size your system to match your annual usage rather than peak summer production. Shift high-energy activities—like running the dishwasher or charging an EV—to midday when solar output is highest. This reduces the amount you pull from the grid during expensive peak hours.
"Net metering turns your home into a mini power plant. The grid becomes your battery—you 'store' excess solar as credits and withdraw them when needed."
Net Metering Policy Changes
Net metering rules vary by state and are evolving. Some utilities have moved to "net billing" or reduced credit rates. Grandfathering often protects existing solar customers under older, more favorable terms. If you're considering solar, research current policies and lock in favorable rates while available.
Battery Storage and Net Metering
Adding battery storage changes the equation. You can store excess solar for evening use instead of exporting it. In areas with time-of-use rates or reduced net metering credits, batteries may improve economics. Use ElectriBill to model different scenarios and see how net metering affects your projected savings.
Net metering makes solar more economical by ensuring you get value for every kilowatt-hour your panels produce. It's a cornerstone of residential solar economics and worth understanding before you go solar.