What is Net Metering?

Net Metering is a simple solar process with great rewards for homeowners and businesses. While the benefits of net metering vary from city to city and state to state, net metering policies are controlled by either electricity companies or local/state-based governments.

Net Metering Definition

Net metering is a renewable energy technology that lets solar-powered homes and businesses sell surplus solar-generated power produced from their panels back on to the grid at a specific rate. Some net metering programs are instituted by utility companies and others are a byproduct of state or city-specific clean energy laws.

Understanding Why Net Metering Matters

Think of a home without solar panels. To use electricity in this home, you must turn on a switch and draw from the utility company's energy reserves, as is the case with all non-renewable forms of energy (like coal-based power). The sun, however, is a renewable form of energy, meaning it is infinite in its capacity.

With the sun's infinite capacity comes the ability for homeowners and business owners to produce surplus power from their solar modules. This surplus power produced from solar-powered buildings is why net metering was invented because it offers a technological medium for either receiving credits/compensation for the excess/unused power produced or an opportunity for the owner of the solar-powered building to store more of that surplus/excess solar energy for use at a later date.

What is Needed to Maximize Net Metering Benefits?

Leveraging net metering incentives to their fullest extent means much more than simply going solar, and it varies by geography. Fully leveraging the benefits of net metering requires battery backup, being tied to the grid, and having highly efficient solar panels.

Why Being Tied to the Grid Matters with Net Metering

Given that net metering policies are utility-company specific, receiving net metering benefits requires having a home that is tied to the grid. While you can leverage solar power off-grid, you cannot benefit from net metering credits and savings without being hooked up to your utility company's grid.

Why Having Battery Backup Matters with Net Metering

If your utility company gives you less than a 1:1 credit (the 100% market rate price) for the solar energy you do not use and export back on to the grid, you will want to have a form of battery backup so you can use your excess solar power generated from your panels at the standard market rate/price.

Why Having Highly Efficient Solar Panels Matters with Net Metering

If you have a highly efficient, monocrystalline set of solar panels, you can export more solar-generated power back on to the grid or store more of it for use at a later date, ideally with a form of whole house battery backup, like the Tesla Powerwall.