Net metering is a billing scheme that enables solar energy system owners to receive credits for the surplus electricity they generate and feed back into the grid. Here's how net metering typically functions: It incentivizes solar system owners by enabling them to offset their electricity consumption with the excess power they produce. Essentially, it allows consumers to store their extra solar energy and utilize it when their energy demand exceeds their solar generation.
When a solar energy system generates electricity, it is initially utilized to power the residence or office where it is installed. Any surplus electricity generated beyond immediate consumption is then supplied back to the utility grid.
A bidirectional meter measures the flow of electricity in both directions: from the grid to the consumer (during periods of low solar generation) and from the consumer to the grid (when the solar system generates surplus power).
For every kilowatt-hour (KWH) of excess power that is fed back into the grid, the solar system owner receives a credit on their utility bill. These credits are typically accrued on an annual basis.
In times when the solar system is not generating adequate power, such as at night or on cloudy days, the consumer draws electricity from the grid. The accumulated credits are then utilized to offset the consumption, reducing or even eliminating the electricity cost from the grid.
Any surplus unused credits can be reconciled at the conclusion of a designated settlement period, often on an annual basis. Depending on the utility’s policies, these credits may either be carried over to the next billing period or reimbursed to the consumer at a predetermined rate.
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