Leigh Weiser, a solar sales consultant from Reseda, California, has worked with homeowners for over a decade benefit from clean, sustainable energy. In the following article, Weiser breaks down the details on net metering, how it works, its benefits, and how it can help you save money on your energy bills.
As the world transitions toward cleaner and more sustainable energy solutions, many homeowners are exploring renewable energy options like solar panels. While the environmental benefits are clear, one of the most appealing aspects of solar energy is its potential to reduce energy bills.
Leigh Weiser Highlights How Excess Energy Becomes Credit
Net metering is a system that allows individuals or businesses with renewable energy sources, such as solar panels or wind turbines, to connect to the local utility grid. When your renewable energy system produces more electricity than you need, the excess energy is then sent back to the grid. In return, the utility company credits your account for the surplus energy. The credits are used to offset what would be consumed when your system isn’t generating enough power, such as at night or during cloudy days.
In essence, net metering allows homeowners to act as mini power plants, producing their own energy and receiving compensation for it. The amount of compensation or credit you receive depends on the local policies, which can vary widely depending on your location.
How it Works
At its core, net metering works by tracking the flow of electricity between your home and the utility grid using a special two-way meter. Leigh Weiser reports that traditional meters only track the electricity you consume from the grid, but a net meter measures both what’s pulled from and sent back to the grid.
Here’s a step-by-step breakdown of how it typically works:
- Your renewable energy system produces most of its electricity during the day, or whenever the renewable resource is available.
- When your system produces, you use it to power your home, reducing the amount of energy you need to pull from the grid.
- If your system generates more electricity than you use, the excess power is fed back into the main grid. The energy flows from your home’s inverter to the grid, making it available to other homes and businesses.
- The utility company credits your account for the surplus energy you’ve returned. These credits can be used to offset future electricity consumption.
Leigh Weiser notes that at the end of each billing cycle, your utility company will calculate the difference between the amount of energy you consumed and the amount you sent back. If you’ve consumed more energy than you’ve generated, you’ll owe the utility company for the difference. However, it’s more likely that you’ll send back more energy than you’ve consumed.
Types of Net Metering
There are several variations in how this works, depending on where you live and the specific rules set by your utility company. The most common types of net metering are:
Full Net Metering: Under full net metering, the utility company credits you at the full retail rate for the electricity you send back to the grid. This is the most beneficial for homeowners because you are compensated at the same rate you would pay for electricity from the utility.
Modified Net Metering: Leigh Weiser says that in modified net metering, you may receive a lower credit rate for the excess energy you send back to the grid. This rate might be based on the wholesale price of electricity or a slightly reduced retail rate. While this reduces the amount of compensation you receive, it still provides an incentive for homeowners to install renewable energy systems.
Virtual Net Metering: Virtual net metering is used for multi-family properties or community solar programs. It allows energy credits from a solar installation on one property to be shared among multiple users, typically within the same service area. This system is beneficial for those who may not have access to space for solar panels but want to benefit from renewable energy credits.
Gross Metering: Under gross metering, all the electricity your system generates is sent to the grid, and you receive a payment or credit based on the total amount of energy you generate, not just the surplus. This can be advantageous for homeowners who generate a lot of excess energy, but it may not be as financially beneficial for those who use most of the power they produce.
Overall Benefits
The most significant benefit is the potential to lower your monthly electricity bills. However, Leigh Weiser explains that among the financial benefits is the reduced reliance on the utility grid. This can provide peace of mind in the event of power outages, especially if you install a battery backup system to store excess energy for use during outages.
Solar energy is a clean, renewable resource that doesn’t contribute to pollution or greenhouse gas emissions. By using solar power, you’re reducing your carbon footprint and supporting the transition to a more sustainable energy system.
Many states and utilities offer financial incentives, rebates, and tax credits for installing renewable energy systems. These incentives can significantly reduce the upfront costs of installing a system and make net metering even more financially attractive.
Leigh Weiser also notes that depending on the policies in your area, you might earn money for the excess energy you send back to the grid. In some areas, if you generate more energy than you consume over the course of a year, the utility may pay you a lump sum for the excess power.
Net metering can save you money in several ways:
Reducing Electricity Bills: By generating your own electricity, you’ll need to purchase less power from the utility company. The more energy your renewable system produces, the less energy you have to buy. As a result, you can save money on your monthly electricity bills.
Offsetting Peak Energy Costs: Energy prices often fluctuate throughout the day, with higher rates during peak demand hours. By generating and storing your own electricity, you can reduce the amount you purchase during peak times, when prices are highest. This can lead to significant savings over time.
Accumulating Credits: During months when your system generates more electricity than you use, you can accumulate energy credits that offset your bills in months when your energy usage exceeds your generation.
Long-Term Savings: While the upfront cost of installing a renewable energy system can be significant, the savings you accumulate over time can make up for it. Many homeowners find that the return on investment for solar panels and other renewable systems is substantial, with savings continuing for decades.
Conclusion
Leigh Weiser concludes that net metering is a powerful tool that enables homeowners with renewable energy systems to reduce their electricity bills and even generate income by sending excess energy back to the grid. By taking advantage of net metering, you can lower your reliance on utility companies, reduce your carbon footprint, and enjoy long-term financial benefits. As renewable energy technologies continue to improve and more states and utility companies adopt net metering policies, the opportunities to save money and contribute to a more sustainable future will only increase.