Net Metering and How to Take Advantage of It

Many journalists will say that people who have solar are “selling power back to the grid”, but that is not the way I like to describe it.  In most areas the utility company owns the monopoly, and buying and selling power is their game, not ours.  While regulated by the state, they write most of the rules.  What we have instead, in most areas where solar is viable, is net metering.

With net metering, every kilowatt hour produced, up to what one consumes, is valued at full retail.  This is a really important underpinning of the value of solar.  One can look at net metering on a daily, monthly, and annual basis.

Daily, the system will create more power during daylight hours than you use, and during that time it will count credits on your net meter.  Then once the sun goes down you’ll use up those credits, and perhaps more of the utility’s energy by the next dawn. 

Monthly, the utility bills you.  If during the daylight hours that month your system produced more power than you used, you’ll have a credit rolling into the next month.  They show that to you on their bill.  You can also see this on your meter, and you can see how much your system produced on your online production monitoring.  The utility company usually does not power your usage data online, but you can always look at the net meter on the side of your house. 

Annually, I recommend that when signing the interconnection paperwork you select “Continuous Rollover” if your utility offers it.  This way any excess credits in your account at the end of each calendar year retains retail value from December to January.  That is, if you have credits in your utility account on December 31, they roll over into January as credits.  If you choose “Defer Decision” then your utility will typically pay you for those credits at “avoided cost”, which is pennies on the dollar.

If you ever hear that net metering is under threat, please support it.  Even if you don’t have solar today, protect your rights to get it in the future.  It’s an important property right for every property owner!