Net metering is a billing arrangement that allows Solar Energy system owners to receive credits for excess electricity they generate and feed back into the grid. Here’s how net metering typically works.Net metering provides an incentive for solar system owners by allowing them to offset their electricity consumption with the excess electricity they generate. It effectively allows consumers to “bank” their excess solar power and use it when their demand exceeds their solar generation.
For every kilowatt-hour (kWh) of surplus electricity fed back to the grid, the solar system owner receives a credit on their utility bill. These credits are typically accumulated on a monthly basis.
During periods when the solar system is not generating enough electricity (e.g., at night or during cloudy days), the consumer draws electricity from the grid. The accumulated credits are then applied to offset the consumption, reducing or eliminating the cost of electricity from the grid.
At the end of a designated settlement period (often annually), any remaining unused credits may be reconciled. Depending on the utility’s policies, these credits may either be carried forward to the next billing period or paid out to the consumer at a predetermined rate.