What is Net Metering?
7/6/17
Net metering allows both homeowners and businesses who generate their own power from solar energy to feed unused electricity back into the utilities’ grid. During specific times throughout the year, a solar PV system may not produce the exact demand for electricity. Net metering allows power to be imported from the grid when needed, as well as exported to the grid when excess is produced. The utilities will only charge customers for the electricity used during each billing period. When a solar PV system produces more than the property consumes, typically during the summer months, the utility credits the customer for the excess production and applies to a billing period when consumption outweighs production.
Where is Net Metering in Place?
Currently, 41 states have some sort of net metering policy in place. Differences in policies range from a limit to the amount that is net metered and how much the electricity is sold back to the utility (usually at the market rate). Ohio has a strong no limit net metering policy, allowing Ohio residents to be fully compensated for their excess electricity production. Net metering policies have proven to help more homeowners and businesses to transition to self-generating solar panels.
Net metering has seen recent victories in several states in the US. In June, Nevada reinstated its net metering laws, which had been cut in late 2015. Following the 2015 net metering cuts, leading solar firms left Nevada and the state lost 2,600 jobs, a testament to the importance of net metering for the solar industry's health. New Hampshire also saw advances in its net metering policy when lawmakers removed the state's net metering cap in July, allowing full compensation for electricity production (similar to Ohio's policy).
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Benefits for Utilities
Net metering benefits utilities as well, allowing them to better manage their peak electricity loads by increasing grid resiliency with localized grid support. By having distributed generation at several points within the grid, the loss rate through transmission and distribution is decreased when customers are producing energy at the point of consumption.
Overall, net metering is a cornerstone of the solar industry, and allows homeowners and businesses to take full advantage of their solar systems any restriction to self-generation is a blatant infringement on consumer rights. Customers should be properly compensated for their excess electricity to the utility grid. The value net metering brings to the utilities and other grid customers is beneficial to a sustainable energy future.