What is Net Metering?
Net metering allows you to use the electric grid, and the company that otherwise supplies you with electricity, as if it were a big battery.
Net metering allows you to use the electric grid, and the company that otherwise supplies you with electricity, as if it were a big battery. There will be times when your electricity needs are less than the amount of electricity your generating system is providing at the moment. Your generating system puts the excess electricity you do not need back into the electric grid to be used by others and allows you to take this same amount of electricity back out of the electric grid. Net metering permits you to "bank" your excess electricity and then withdraw it from the grid for your use.
For example, on a sunny summer day when no one is home, a photovoltaic (solar) generating system might produce more electricity than needed at the time. Conversely, in the evening, when everyone is home, electricity needs would exceed the output of the system.
Most electric meters measure electricity moving both into and out of your home or business. Generally, we are taking electricity from the electric grid for our needs. The meter runs "forward" as it counts up the kilowatt hours we have consumed. But if you generate electricity with a photovoltaic or wind generating system and you make more electricity than you need, net metering legally allows this excess electricity to run the other way through the meter and back into the electric grid. Just like running your car in reverse, the meter now turns backwards.
Net metering, thus, might result in your meter turning backwards at mid-day when the sun is the strongest and running forwards at night when a solar system stops operating. If you put 10 kilowatt-hours (kWh) of excess electricity into the electric grid during the day, net metering allows you to take 10 kWh of electricity out of the grid later and pay nothing extra for them. In effect, you are allowed to "bank" these 10 kWh and use them later to offset your need to buy 10 kWh. Thus, you can get full retail value for the electricity you generate.