How Does Net Metering Work?

How Net Metering Works: A Simple Guide for Homeowners

As more homeowners switch to solar energy, understanding how you can maximize your savings becomes increasingly important. One of the most significant benefits of going solar is something called "net metering." But what exactly is net metering, and how does it work? In this blog post, we’ll break down the concept and explain how it can benefit you as a solar energy user.

What Is Net Metering?

Net metering is a billing arrangement between solar energy users and their utility companies. It allows homeowners who generate their own electricity using solar panels to feed excess electricity back into the grid and receive credit for it. In simple terms, net metering lets you "sell" the surplus energy your solar system produces back to the utility company, reducing your overall electricity bill.

How Does Net Metering Work?

When your solar panels generate more electricity than your home consumes, the excess power is sent back to the grid. The utility company tracks this excess energy and credits your account. Later, when your solar panels aren’t producing enough electricity to meet your needs (such as at night or on cloudy days), you can use those credits to offset the electricity you draw from the grid.

This exchange is measured in kilowatt-hours (kWh), the same unit used to measure your electricity consumption on your utility bill. For example, if your solar panels generate 100 kWh of excess electricity in a month and you use 100 kWh from the grid later, your bill would show a net usage of zero kWh for that period, meaning you wouldn’t owe anything for electricity.