NET METERING
What is Net Metering? How Can You Benefit?
What is Net Metering?
How Net Metering Works and it’s Benefits
Net Metering Policy is a billing arrangement between the homeowner and the public utility company that allows the homeowner to send their excess solar power to the grid in exchange for credits. In simple terms, it means that whatever extra electricity your solar panels produce will be sold to the public utility company.
Just like electricity can flow from the public grid to your home, it can also flow from your solar energy system back into the grid.
The credits that you earn after selling electricity back to the grid can be used to earn credits against your electricity bills.
These credits can then offset the cost of electricity drawn from the grid.
How Net Metering Works?
Net Metering needs a bi-directional meter, which in turn allows you to send excess power back to the grid. The process works as follows:
Step 1: Solar Power Generation
Your solar energy system generates electricity/power during the daylight hours. In case, your solar energy system generates excess power, the step covered below is triggered.
Step 2: Power Flows to the Grid
Due to the bi-directional meter, the power flows to the grid if your solar powered energy system generates excess power. The meter also logs this. The electricity that you send to the grid helps you earn credits.
Step 3: Ability to Draw Extra Power
At times when your solar energy system isn’t generating enough power (For example: At night), you can draw power from the grid, and offset its cost against these credits. The entire process is automated; you do not need to do anything.
If you do not draw enough power from the grid, you end up earning credits. You can offset these credits against your bill in the future, bringing it close to 0.
Different states have different Net Metering (NEM) policies. We will cover the details for a couple of states below.
California NEM 3.0
States revise their NEM policies from time to time. Currently, California has NEM 3.0, whose details are as follows:
Power Rate
NEM 3.0 helps consumers sell power back to the grid in California at a cost between 4 to 8 cents/kWh. The exact rate you get depends on a variety of factors like:
Time of the day:
Each hour of the day has different rates assigned to it, depending on the power requirement at that time.
Avoided Cost Calculator (ACC):
Rates also depend on the Avoided Cost of the energy that you feed back into the grid. Again, this depends on energy prices, environmental factors, and grid demand.
Day of the week:
Rates vary depending on the day of the week as well.
Export Rate Adders:
Many utility companies like Pacific Gas and Electric also add to the base rate as Export Rate Adders. Exporting power back to the grid when these are active helps you earn more credits. Examples include Pacific Gas and Electric, which offered an additional 2.2 cents per kWh from April 15, 2023, to April 14, 2024.
California Nem 3.0 Cost Comparison
Utility Company vs. Solar System Only vs. Solar Energy System + Battery
Florida NEM
According to Bill CS/CS/HB 741 in Florida, customers will get a different credit rate based on when they apply for NEM. The 3 distinctions include:
- Applications approved between January 1, 2024, and December 31, 2025, will receive a credit rate equal to 75% of their energy usage rate.
- Applications approved between January 1, 2026, and December 31, 2026, will receive a credit rate of 60% of their energy usage rate.
- Apply between January 1, 2027, and December 31, 2028, and the rate falls to 50% of the energy usage rate.
Additionally, the maximum power they can sell to the grid shouldn’t be more than 115% of their anticipated usage. If you’re thinking about going solar, now is the time to do so, as you get the maximum credit rate.
Savings Comparison
Solar System Only vs. Solar Energy System + Battery
While Net Metering in respective states makes solar energy systems more lucrative, but even without NEM you can save thousands of dollars by going solar. NEM boosts the savings even more. Check the graph below to understand how.
| Years | Solar Only | Solar + Battery Backup |
|---|---|---|
| 10 years | $ 16,800 | $ 24,482 |
| 20 years | $ 55,000 | $ 72,000 |
Benefits of NEM
Whichever state you’re in, there are numerous benefits of NEM, as highlighted below:
Lower Electricity Bills
The #1 benefit of NEM is, of course, that it reduces electricity bills. This means you no longer need to worry about paying the monthly bill. Even if you get the electricity bill, it will be very close to 0 if you utilize NEM.
Energy Independence
We help our customers meet the public utility company’s requirements to utilize the net metering policy. Once we activate the system, you can sell extra power back to the grid to earn credits, bringing your bill down to almost $0.
Faster Breakeven
With the help of NEM policy, you recover the amount invested in your solar energy system faster. Since a solar energy system can last for 25 years, breaking even sooner means you can earn more profit from it in the long-term.
Maximum Utilization of Solar Energy
According to this research report, solar energy lowers carbon footprint by 95% compared to coal. With the help of NEM, maximum utilization of a solar energy system is possible, which means you are doing your best to lower carbon emissions.
Net Metering Boosts Property Values
NEM leads to lower electricity bills, which makes such a home more financially appealing to prospective buyers, leading to higher prices. In fact, as per a research report by Berkeley Lab, homebuyers are willing to pay more for homes with solar energy systems. So, you can only imagine how likely they would be to pay a higher price for a home that is not reliant on public infrastructure for electricity.
Common Myths Surrounding NEM
Despite NEM being an integral part of utilizing a solar energy system, there are numerous myths surrounding it, which we will debunk below.
Net Metering is complicated
The #1 benefit of NEM is, of course, that it reduces electricity bills. This means you no longer need to worry about paying the monthly bill. Even if you get the electricity bill, it will be very close to 0 if you utilize NEM.
Solar panels don’t produce enough energy for Net Metering
With the help of NEM policy, you recover the amount invested in your solar energy system faster. Since a solar energy system can last for 25 years, breaking even sooner means you can earn more profit from it in the long-term.
A big roof is required to take advantage of Net Metering
According to this research report, solar energy lowers carbon footprint by 95% compared to coal. With the help of NEM, maximum utilization of a solar energy system is possible, which means you are doing your best to lower carbon emissions.
Cloudy days impact Net Metering earnings
We help our customers meet the public utility company’s requirements to utilize the net metering policy. Once we activate the system, you can sell extra power back to the grid to earn credits, bringing your bill down to almost $0.
Net Metering Credits expire quickly
NEM leads to lower electricity bills, which makes such a home more financially appealing to prospective buyers, leading to higher prices. In fact, as per a research report by Berkeley Lab, homebuyers are willing to pay more for homes with solar energy systems. So, you can only imagine how likely they would be to pay a higher price for a home that is not reliant on public infrastructure for electricity.
How to get started with Net Metering
It’s not that difficult to get started with Net Metering. In fact, we handle everything for you. Just submit your details through the Get A Quote! page, and one of our executives will contact you for the initial consultation. We will follow the procedure below:
Evaluation of Energy Requirements
We will first evaluate your home’s energy needs and survey your premises.
Solar Energy System Design
We will design a system that meets your requirements and get your approval for the system. We also share with you the multiple financing options available.
Get the Documentation Done
We will help you with all the documentation for NEM, approvals from HOA, and so on.
Install the System
After completing the documentation, we will install the system on a designated day and integrate a monitoring device. Using this device, you can monitor the amount of energy generated.
At the end of the monthly billing cycle, you will earn credits for the energy fed back to the public grid.
That’s it! We make Net Metering easy for you.
Ready to Go Solar?
Net Metering has proven to be very beneficial for homeowners who have gone solar. It helps bring the electricity bills down to 0 and also break even sooner, both of which reduce the financial burden on homeowners. Simply follow our guide above, and you can easily get started with Net Metering.
Ready to Go Solar? Submit your details and get a quote – one of our experienced executives will get in touch with you.
