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, the control of net metering policies comes from either electricity companies or local and state-based governments.

Net Metering Definition

Net metering is a renewable energy technology that lets solar-powered homes and businesses put their surplus solar-generated power back onto the grid and sell it back to the utility company at a predetermined rate for other homeowners to use. Sometimes utility companies institute net metering programs, or they're created by state or city-specific clean energy laws.

Understanding Why Net Metering Matters

Think of a home without solar panels. To use electricity, the home must draw from the utility company's energy reserves. The sun, however, generates a renewable form of energy, meaning it's infinite in its capacity.

With the sun's infinite capacity comes the ability for homeowners and business owners to produce surplus solar power from their solar modules. However, they need a way to store it so they can use it when the sun isn't out.

For many, the solution to storing surplus solar power has become net metering, coupled with battery backup. Through net metering technology and policies, utility customers receive compensation — either through a credit on their bill or a check from the utility for their excess solar-generated power. This offsets the energy pulled off of the grid at night and during poor weather.

The Sustainability of Net Metering for Utilities and Customers

While many utilities started their solar net metering programs with net metering, many argue that this metering system isn't sustainable for utilities after a certain amount of homes add solar. 

Utilities and power companies typically have two main arguments against net metering, neither of which considers the interests of the homeowner. First, utilities argue that solar customers don't cover grid maintenance costs when they only pay a connection fee. Secondly, net-metered customers put energy on the grid during low demand times and draw power during peak usage times without paying for it. 

Net metering, as it stands currently, isn't a sustainable solution by itself. It's a Band-Aid approach to solar power storage. As solar storage options have become affordable, people have started to rely less on the grid for their solar storage needs, turning to battery backup to leverage their solar arrays. Instead, they use the grid as a plan B, should their system fail.

What Is Needed To Maximize Net Metering Benefits?

Leveraging net metering incentives to their fullest extent means much more than just adding solar. Fully leveraging the benefits of net metering comes when grid-tied homes use battery backup and highly efficient solar panels, which are properly installed for maximum PV ray absorption.

Why Net Metering Requires Homes Stay Connected to the Grid

Receiving net metering benefits requires having a grid-tied home. Off-grid homes don't have a way to put excess solar power on the grid or pull power from it. While off-grid homeowners can leverage solar power, they cannot benefit from net metering credits and saving. They can, however, fully own their power and still rely on battery backup.

Why Having Battery Backup Matters With Net Metering

If the utility company offers less than a 1:1 credit (the 100 percent market rate price) for the solar energy you export back onto the grid, you will want to have a form of battery backup. Battery backup empowers solar homeowners by providing full control over their excess solar power, including how much is stored and when it is used. 

Why Having Highly Efficient Solar Panels Matters With Net Metering

If you have highly efficient, monocrystalline solar panels, you can export more solar-generated power back onto the grid or store more for later use. Homeowners who want to meet all their energy needs with a battery should look into a form of whole house battery backup, like the Tesla Powerwall.


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