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Back in 1979, when people started installing solar panels in their homes, some very intelligent solar enthusiasts invented a concept known as Net Metering. Net metering allows the homeowner of a solar-powered home to sell the access energy that their solar system produced back to the utility company. So if your solar system produced 1,500 kWh of energy in one month and your home only used 1,400 kWh, you could sell the additional 100 kWh back to the utility company at a profit. The specific buyback rate differs from one utility company to another and some states have better net metering incentives than others. I recommend calling your utility company and getting the details on their net metering policy. A quality solar advisor will do this for you and explain your utility companies (and states’) net metering policies and incentives as part of their presentation. Please also refer to the state-specific solar incentives and policies outlined in part 2 of this book. I have devoted an entire section to detailing state-specific Net Metering policies as well as rebates, SRECs, tax exemptions, and laws protecting homeowners’ rights to install solar panels.


What is Net Metering in Solar?


Net metering in solar refers to the practice of measuring the difference between the amount of electricity a homeowner uses from the grid and the amount of electricity they generate and feed back into the grid. This allows homeowners and businesses to receive credits for any excess energy their solar system generates, which helps to offset the cost of their electricity usage.


How Does Net Metering Work?


Net metering works by using a special meter that measures the flow of electricity in two directions: from the grid to the homeowner or business, and from the homeowner or business to the grid.

When a homeowner generates more electricity than they are using, the excess energy is fed back into the grid and credited to their account. When a homeowner uses more electricity than they are generating, they draw from the utility company and pay for the electricity they use.


At the end of the billing cycle, the homeowner or business is only charged for the net amount of electricity they used from the grid. This means that they will only pay for the difference between the amount of electricity they generated and fed back into the grid and the amount of electricity they used from the grid.


As more homes go solar, utility companies stand to lose more revenue. As a result, many utility companies are working with their state’s Public Utilities Commission (PUC), to find new ways of making solar more expensive. Increasing grid connection fees are just one of the ways they do this. But homeowners are often grandfathered in at the current net metering policy based on when they go Solar. This means that the sooner you go solar the more money you stand to save and those who play the “wait and see” game will more than likely end up paying for it.


What are the Benefits of Net Metering?


There are many benefits of net metering for the individual homeowner including:



1. Reduced Electric Bills: By generating their own electricity through solar panels, homeowners can reduce their reliance on the grid and lower their energy bills.



2. Increased Energy Efficiency: Net metering encourages homeowners and businesses to be more energy efficient by using the excess electricity they generate instead of drawing from the grid.



3. Support for Renewable Energy: Net metering helps to encourage the adoption of renewable energy by making it easier for homeowners and businesses to invest in solar systems.


4. Improved Energy Security: By owning a system that generates their own electricity, homeowners can improve their energy security and reduce their dependence on the grid.



5. Increased Grid Stability: Net metering helps to stabilize the grid by reducing the amount of electricity that is being drawn from the grid during peak periods and increasing the amount of electricity being fed back into the grid during off-peak periods.



What is net metering 3.0?


Net Metering 3.0, also known as NEM 3.0, is a California solar initiative that allows solar panel owners to receive credit for the excess energy they generate and send back to the grid. It also allows for the use of solar battery storage systems, which can store excess energy generated during the day for use at night or during periods of high energy demand. This initiative aims to promote the widespread adoption of solar energy and support the integration of renewable energy sources into California’s power grid. NEM 3.0 is expected to enable more customers to install solar and storage systems by providing fair compensation for their contributions to the grid.


How do solar batteries impact net metering?


Solar batteries and net metering are intertwined because, to be entirely energy independent and off the grid, you must have batteries and net metering would not apply. Solar systems can run without batteries because the utility company acts as a virtual battery in a sense.  The utility company is vital to make net metering possible. So if your goal is to be entirely off-grid and run completely on solar batteries, you would not be able to enjoy the benefits of net metering.


Do My State and Utility Have a Net Metering Program?


If your home’s solar energy system produces more energy than your home uses, net metering makes it possible for you to sell the additional credits back to the utility company. Of course, net metering is an attractive selling point for Solar. However, some states and some utilities don’t even offer net metering. The best thing to do is to ask your solar advisor and/or call your utility company and ask them if they have a net metering program. If your utility tells you they don’t offer net metering and your solar sales rep is telling you that you can sell your credits back to the utility company at a profit, that is probably a good time to end the meeting and throw the little dirtbag out of your house for lying to you. And again, he or she may not even realize they are lying to you. So maybe don’t call him a dirtbag. It may just be how they were trained. A qualified solar sales advisor will have done their homework and called your utility company prior to the meeting so they can present you with the most accurate net metering information.

Introducing: The definitive Guide to Residential Solar in the U.S. <==Click here to check it out on

A residential solar system is a great way to reduce your energy costs while doing something positive for your community and the planet. However, when a home solar system is not designed and sold with integrity, it can have a tremendous negative financial impact on the homeowner.

Throughout The Definitive Guide to Residential Solar in the U.S., you will discover the many ways that homeowners have been taken advantage of by smooth-talking solar sales reps. Only to find out, often many months or years after they signed an ironclad contract, that their home solar system is not producing anywhere close to the amount of energy that they were told it would. Many of these homeowners found themselves having to pay a monthly solar bill on top of an electric bill, that they were told would vanish after installing solar panels. This is the unfortunate reality for thousands of solar pioneers and it is the #1 reason that residential solar deserves the bad reputation it has in many markets across the U.S.