Everything You Need to Know About Net Metering

Installing a solar system on your home is one of the best ways to save money and protect the environment by reducing your reliance on fossil fuels. However, as many homeowners examine the options for solar they discover a potential challenge: solar panels capture energy during the day (obviously), while most of your energy consumption occurs when the sun is down. One solution is to install a battery backup, which stores the energy from the daytime for use at night, but that adds to the cost of installing your system and can put solar out of reach for some homeowners.

An alternate solution is to connect your home to the local grid and send excess solar energy to the power company during the day so they can store it, then use power from the grid at night. But you want to make sure you are getting the financial benefits of the electricity you generate (and not paying for power from the local utility when your solar panels generate enough to meet your needs). With net metering, you get the best of both worlds.

Understanding Net Metering

Net metering, sometimes called net energy metering (NEM), is an agreement between homeowners with solar panels and the local power grid to store energy from your system with the local utility company. In exchange, you get a “credit” for all the extra solar energy that offsets your energy usage at night or on days when there isn’t enough sunlight.

It’s important to note that net metering is not a way to generate extra income for homeowners. There are myths and misunderstandings that if your solar energy system generates more electricity than you use in any given month, your power company will pay you for the extra energy, but this is not the case. There will be months where your panels produce more energy than you can use (for example, in the summer when there are more sunlight hours), but your utility will simply carry over your credits to future months when your panels might not produce enough to cover all your power needs (cloudy days or winter months).

Benefits of Net Metering

Net metering offers homeowners with solar systems:

  • Cost savings – one of the main reasons homeowners get a solar system is to save money. With net metering you can, by producing enough energy to cover your energy needs while avoiding the cost of installing a battery backup.
  • Less uncertainty – if you are relying entirely on a battery backup, you need a larger solar system to account for fluctuations, such as cloudy days, less sun in winter, or higher energy usage. With net metering you can smooth out those fluctuations and still ensure you have enough energy to power your home.

It’s important to note that not every state allows for net metering. Some have alternative compensation and distribution policies (similar to, but not quite the same as net metering). Seven states don’t have specific laws on the books, but the utilities are voluntarily offering net metering. Since policies can vary, it’s important to understand your local laws to ensure you will get what you are expecting.

To learn more about net metering in your state and how it works for your system, talk to Intermountain Wind and Solar.

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