Back to Solar 101Understanding Net Metering: Turn Your Meter Backwards
Net Metering Explained
Net metering is the billing mechanism that credits solar energy system owners for the electricity they add to the grid. It's like having a bank account for your electricity - deposit when you produce extra, withdraw when you need more.
How Net Metering Works
Daytime Production
Your solar panels produce electricity during the day. When they generate more than you're using, the excess flows to the grid.
Meter Runs Backwards
Your electric meter literally spins backwards (or digitally credits you) as you send power to the grid, building up credits.
Nighttime Usage
At night or during cloudy periods, you draw power from the grid, using the credits you've accumulated.
Monthly Settlement
At month's end, you only pay for your "net" energy use. If you produced more than you used, credits roll over.
Real-World Example
Sarah's Monthly Energy Flow
Production
- • Solar production: 1,200 kWh
- • Self-consumed: 400 kWh
- • Sent to grid: 800 kWh
- • Credit earned: $120
Consumption
- • Total usage: 1,000 kWh
- • From solar: 400 kWh
- • From grid: 600 kWh
- • Grid cost: $90
Monthly Bill:
$0
Plus $30 credit rolled over!
Types of Net Metering
1:1 Full Retail Net Metering
You receive the same rate for energy you produce as you pay for energy you consume. This is the most favorable for homeowners.
Time-of-Use (TOU) Net Metering
Credits vary based on when energy is produced/consumed. Peak hours earn more credits.
Off-Peak
$0.08/kWh
Mid-Peak
$0.15/kWh
Peak
$0.25/kWh
Net Billing / Buy-All Sell-All
You sell all production at wholesale rates and buy all consumption at retail rates. Less favorable but still provides savings.
State-by-State Variations
Net metering policies vary significantly by state and utility. Here's what to know:
States with Strong Net Metering
- • California (NEM 3.0 - modified)
- • New York (full retail)
- • Massachusetts (full retail)
- • New Jersey (full retail)
- • Colorado (full retail)
Important Considerations
- • Policies change frequently
- • Grandfathering often applies
- • System size limits may apply
- • Annual true-up periods vary
- • Some states allow credit sales
Maximizing Net Metering Benefits
Optimization Tips
- ✓ Size system for 100-110% of usage
- ✓ Shift usage to daylight hours
- ✓ Monitor production vs consumption
- ✓ Understand your rate schedule
- ✓ Track credit accumulation
Common Mistakes
- × Oversizing system unnecessarily
- × Ignoring time-of-use rates
- × Not tracking credits
- × Missing annual true-up dates
- × Assuming policies won't change
⚠️ Act Now: Policies Are Changing
Many states are reducing net metering benefits. California's NEM 3.0 reduced credit values by 75%. Lock in current rates by going solar now - existing customers are typically grandfathered into their original agreements for 20+ years.
Check Your Net Metering Policy
Find out exactly how net metering works in your area and calculate your potential savings with our free solar assessment.
