Solar net metering is a convenient way of saving your excess energy for a rainy day. More often, we do not utilize the energy generated by the solar energy system installed in our homes. Or we can store it in solar batteries, which entails an additional investment and has its limitations. But if you can store it using the electric grid, it can always be used at your convenience.
We realize that solar power helps us immensely in reducing utility costs. Many homes even generate more power than they utilize. And it is this excess energy that gets wasted if it is not properly utilized and channeled. Solar net metering is one way in which people who generate excess solar energy can upload it to the grid either for later use or as an outright sale.
How Solar Net Metering Works
Most solar energy systems are linked to the main grid. Thus, if a homeowner generates more solar electricity than they generate, it can be sent back to the utility company. This gets credited to the account of the homeowner and gets deducted from their bill for conventional electricity.
By generating more than they require, homeowners can thus be a source of energy themselves, a sort of mini-generators of energy, instead of being merely a consumer.
Customers are only billed for their net energy usage, which is the total energy consumed from the grid, minus the excess power they send back to the grid. Thus commercial and residential customers who generate solar electricity can feed unused and excess electricity back into the grid.
The mechanism of solar net metering thus allows the owners of the energy system to get credits for the electricity they add back to the main grid. For instance, a customer who has a photovoltaic (PV) system that converts sunlight directly into electricity may generate electricity above their requirement during daylight hours.
If the home has been fitted with a solar net metering system, the meter will credit the amount of electricity and adjust it during peak nighttime consumption, when the consumer’s demand outstrips the electricity generated by the solar electricity system.
The customer thus pays only for their net usage of energy, the net of the total energy consumed minus the energy that is sent to the grid during off-peak hours, when demand is at its lowest: thus the name, solar net metering.
In almost all cases, solar net-metering programs allow the energy credits to be carried over to the following month. So any excess generation in one month will have a positive impact on your energy bill in the next.
Excess credit usually builds up in the summer months as the days are sunnier and longer. Credit during these months will stand you in good stead during the winter darkness.
But this system of carrying over credits from one month to the next depends on the true-up policy of your utility. True-up policy is the frequency with which the utility buys out your credits. These details are hidden in their solar net metering rules.
Solar Net Metering And The Environment
As most power grids rely on fossil fuels, solar net metering has immense environmental benefits. Even building that does not have space for installing solar systems contributes to a reduction in emission by using clean solar energy that has been generated by other properties.
Thus solar net metering can considerably reduce greenhouse gas emissions and decrease the environmental impact of your use of energy. While mainstream energy uses coal or other fossil fuels, solar energy does not contribute to any direct pollutants. It is thus far more environmentally friendly than conventional fuels.
Bringing Down The Utility Bills
The most obvious savings from solar installation is the impact it has on electricity bills. By harnessing energy from the sun, you can cut back on your electricity consumption. You will see a sharp fall in your energy bills. The average solar systems last for 20 to 30 years. Thus, you will have recovered your investment within the lifetime of your investment.
Solar net metering can lead to annual savings in tens of thousands during the total lifetime of the solar panels. Most policies of the solar energy system are designed to offset the total energy bill of a customer within a billing cycle. However, most electricity bills have a fixed charge component that can not be eliminated by the solar net metering system.
A Short Payback Period
If you are fortunate to live in an area that offers full solar net metering, your payback period will be short. As a solar homeowner, you will be saving on your electricity bill from day one, and your investment costs will recoup faster.
A solar power generation system in New Jersey, for instance, will take between 4 and 5 years for a total payback as there is a total net metering system. But a similar system in Dakota will have a payback period of around 12 years due to the lack of a solar net metering system.
But the payback period is not merely influenced by the solar net metering system. There are other factors, including your electricity use, the photovoltaic system’s size, installation cost, and the rebates and incentives offered by the utility provider in your area, that influence your payback period for your solar panels.
Easing The Pressure On The Grid
One added advantage of installing solar panels in residences is that they help to reduce the stress on the electricity distribution system. Every solar homeowner is not only easing the pressure on the grid by not drawing power from it, they might also be contributing power from the excess that is being generated in their homes.
The excess energy that is uploaded by customers to the grid is utilized by other customers who do not have the backing of solar power generation systems. This is especially helpful when there is an excessive demand during peak hours.
The excess energy generated is especially valuable in places like California as successive periods of drought and heatwaves have led to a shortage of required power.
The Availability Of Solar Net Metering Systems
The solar net metering system has been mandated technically in 38 of the 50 states, plus in Washington D.C. of these, full-retail type of net metering is required in 29 of them. 17 states offer some form of alternative solar net metering tariff or program.
Additionally, some utility majors in Texas and Idaho are offering solar net metering to residential customers who have solar systems installed, even though they are not required to do so by law.
Only Tennessee and South Dakota do not have a system of solar net metering in place or even alternative net metering. But even these states may turn to this system. But utility majors are facing a problem as more people get onto the solar savings bandwagon. It is affecting their profit margins.
Turning Th The Net Metering System When The System Is Still In Place
Despite being a promising system that benefits both power customers and utility majors, the solar net metering system is under pressure as the companies look to increase profit margins.
Going solar earlier is in the best interests if you are interested in bringing down your electricity bills considerably. If the electricity companies have their way, the days of solar net metering could soon be a memory.
How much electricity is it prudent to generate?
You receive utility bill credits under the solar net metering system for the electricity that your solar panels generate. But the utility companies do not give any cash payment for excess net generation of solar electricity.
If you do generate more that you have used in a certain period, it will be carried over to the next billing cycle. Keeping that in mind, it is prudent to select the right size of solar panel system for your home, which will cover your total electricity requirements for the year. You need not produce way more than what you would need.
Benefitting The Neighborhood With Your Solar-Powered Home
Excess energy generators in an area support the load of neighbors who consume more electricity. It saves them money and also helps their neighbors with uninterrupted electricity.
The generation of excess electricity also benefits the utility companies as they do not have to spend extra funds to update their infrastructure. Transmission-line congestion which leads to rolling blackouts and other forms of outages such as upgrades and repairs is also eased.
Climate change is putting further pressure on our aging electricity grid. Billions of dollars will be needed to upgrade the systems. The expansion in the source of power will be vital for preventing a total loss of power in case of an emergency. This has the potential to save billions in rebuilding and repairing expenses.
Neighborhoods that rely more on solar power benefit from the clean form of solar energy that is not dependent on the burning of fossil fuels. This diversification of our energy supply ensures a reliable source of power where the pricing structure remains constant and affordable. The creation of an additional industry also leads to more jobs.