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  • Melissa Deaver

Net Metering

Net metering is a program that credits solar energy system owners for the electricity they produce beyond their consumption. Many states have passed net metering laws, and these programs will vary from utility company to utility company.

How Does It Work?

Net metering is a billing mechanism established with your utility company. Upon installing your array, you will get this set up. Any energy that is produced beyond what you use will be fed back into the grid for other customers to utilize. This excess energy runs the electricity meter backwards in a sense. The utility will credit your account for this amount. When your energy usage is higher than your solar production, like at night, then the meter will run forward, essentially utilizing your previous surplus. You will only be billed for your net energy use.

In general, most homes will produce excess electricity in the summer and use more electricity from the grid in winter. Building up these extra credits in the summer months can help you offset your utility bill in the winter.

Most utilities will have a "true up" or settlement month. Any credits that have not been used up in the previous 12 months will be granted to the utility company without compensation to you, the customer. After the settlement, the 12 month period starts over and you can begin accumulating credits again.

How Will It Look on My Utility Bill?

How your utility's net metering program is set up will determine the size of array you will want to install. MidAmerican Energy, for example, is the primary utility company in our area. They have a system where they will credit you for up to 125% of your production, so we size these arrays to fall within 100%-125% offset to maximize your benefit. This means that anything you produce that is over 125% of your consumption will be fed back to the grid and you will not be compensated for it. That is why we don't want to make an array larger than 125% of your current usage. You'd essentially be paying for a larger array just to feed your surplus back to the grid without compensation.

See below for a real-life example of what this may look like on your utility bill from an existing client.

On the left hand side, you can see the comparison month to month of electricity that was delivered to the customer and the electricity produced by the customer. On the right hand side, the charges are broken down.

It's important to do your research into your utility company and how their net metering program works before committing to an installation. There are utilities we have ran into where their net metering program is actually a detriment to the customer and it didn't make financial sense to install.

Most programs, however, will be of benefit to the customer. These programs are in place to incentivize more installations - to provide cleaner energy for all.

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