Going solar is the right way to gain ownership of your electricity while doing your part to save the planet. And with guaranteed savings and reduced carbon emissions, the long-term benefits are undeniable.
But while many people may still be unsure of all the benefits a solar system can offer, net metering is one more reason why going solar is a no-brainer!
Participating in net metering allows you to get compensated for any unused energy produced by your solar system. It’s a great incentive for any would-be solar owner as it helps you make the most of your solar investment and contribute to the renewable energy movement.
In this article, we’ll explore why net metering is one of the best incentives to go solar and how it varies across different states.
What is net metering?
Net metering is a billing system that helps solar owners receive credits for any extra solar energy that is sent back from their system to the grid.
Basically, in summer when the days are longer and there are more daylight hours, your solar system generates more electricity. It will likely produce more than you even need. Conversely, in the winter when there are less daylight hours, your system won’t perform to its full potential and will produce less energy while your electric needs will likely rise (as you spend more time indoors or start using your heating systems).
With net metering, when your system generates excess energy in the summer and sends it back to the grid, your utility credits you for every unused kilowatt-hour. These credits can then be used to offset your high electric costs in the winter or any other time that your system generates less power than you need.
How does it work?
- Your solar panels produce more energy than needed during the day. That extra energy is sent back to the grid, pushing your electric meter backward (your meter measures the flow of electricity to and from your house).
- At night time or on days when sun exposure is limited, your panels will generate less electricity than you need. That is when you’ll pull energy back from the grid to make up for that difference. This runs your meter forward.
- At the end of your billing period (monthly or yearly), your utility reconciles the amount that you sent to the grid and the amount that you took from it and sends you credits for the net difference.
What are the benefits of net metering?
- It increases your electricity savings: In addition to regular, long-term savings from your rooftop system, net metering helps you save even more thanks to the credits you earn for the extra energy produced by your system.
- It helps reduce your dependence on fossil fuels: Net metering helps to clean up the grid even more given that when you pull energy from the grid (at times when your system underproduces), you’ll now rely on less fossil fuel energy because you’ll be pulling back cleaner energy instead.
- It makes your rooftop solar system more efficient: With net metering, you can start making the most of your system a lot earlier. It helps you make efficient use of your solar panels, not waste extra energy and thanks to your earned credits, pay back your system a lot faster.
Net metering differences across states
A common misunderstanding with net metering is that you get paid for the extra energy your system produces. That’s not exactly true because utilities typically provide solar owners with bill credits that help reduce their future energy bills. Nevertheless, it’s important to remember that this incentive’s structure varies widely across states. Here are some key differences to be mindful of:
| State | Net Metering Structure |
| Colorado | Credits roll over month to month; crediting policies vary by utility |
| Delaware | Credits received in kWh, not dollars; credits reset at the end of a 12-month period (set by you) with no rollover beyond that |
| Illinois | Net metering credits only valid for supply and transmission charges on your bill |
| Maine | Credits roll over month to month; received in kWh |
| Maryland | Credits received in kWh; excess credits can be redeemed for cash |
| D.C | Credits roll over month to month (unused credits will expire by the end of a calendar year) |
| Massachusetts | Eversource, National Grid and Unitil offer net metering for systems with inverters under 25 kW |
| Minnesota | Credits roll over month-to-month |
| New Jersey | Energy credited at the retail rate for up to 100% of your annual electricity usage |
| New York | Unused credits roll over until the end of the term |
| Virginia | Credits roll over month to month |
| Pennsylvania | Energy credited at the retail rate for up to 100% of your annual electricity usage |
| California | Transitioned to a net billing system that compensates customers at the wholesale rate of electricity |
On April 14th, 2023, California shifted from traditional net metering to a new policy (NEM 3.0) that follows a net billing system. Since it went into effect, new solar owners have been credited for their system’s extra energy based on the wholesale rate of electricity (instead of the retail rate from traditional net metering), while customers who set up their systems prior to the change were grandfathered into the original net metering program. Investing in battery storage can help customers ward off the impact of this shift but it will still reduce their long term savings. Moreover, other states are likely to follow suit and adopt net billing policies to keep up with rising grid maintenance costs.
For more info on state net metering policies, make sure to visit the DSIRE database of state incentives or reach out to your utility provider for detailed information.
Final Note
Net metering is not just good for your wallet. It also plays a key role in promoting renewable energy and sustainable living and makes the choice of going solar that much more attractive!
If you are ready and want to learn how to get your system set up, reach out to us for a consultation and we’ll be happy to help.
Learn how you can help by joining the movement
Written By Alfreda Adote | Edited By Lauren McGregor