Getting the Most Out of Your Solar PV System: Understanding Net Metering

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Net metering is a term that can be confusing to solar PV system owners. With net metering, the solar power system owner will typically receive credits for the electricity they generate and pay their utility company for net energy usage. This blog post will help you understand net metering by explaining what it is, how it works, and the benefits of producing your own electricity under a net metering policy.

What is net metering?

Net metering, also known as net energy metering, is a policy that allows solar PV system owners to receive full credit for the clean energy they generate from their solar panels. As the solar panel system produces electricity, the power is first used to meet the owner’s own demand. If the solar energy system produces more electricity than what the owner needs, the extra electricity is fed into the utility grid and credited to the owner at their full retail value.

How does net energy metering work?

To put it simply, in “net metered” systems, the meter runs forward when the home or business is using more power than is generated by the solar panels. It runs backwards when the solar panels are generating more power than is being consumed on-site. The system owner receives a credit from the utility for the value of the excess electricity sent to the grid. In other words, the solar system owner is charged only for the “net” electricity consumed.

From a technical standpoint, how does net metering work?

First, it’s important to understand the difference between direct current (DC) and alternating current (AC) electricity. Direct current (DC) electricity is what solar panels produce and what batteries hold in storage, while alternating current (AC) electricity is the type used on the grid and in most household devices. A device called an inverter is required to convert the DC electricity from solar panels into appliance-friendly AC.

Regarding net metering, the inverter takes the DC electricity generated by your solar panels and converts it to AC electricity. From there, the AC electricity goes into the main breaker panel of the home or business and back feeds that electricity through any loads that are being used in the house or business. Through a busbar, a thin strip of copper or aluminum between cells that conducts electricity, it transfers that electricity to your home’s or business’s lights, printers, dishwasher, or any AC load. If a solar owner’s system generates excess energy above what the house or business is consuming, then the excess electricity goes back out onto the grid and is credited back on your electricity bills. For Duke Energy NC customers, it is credited at a 1:1 ratio.

Can my house be net-zero?

What do we mean when we say net zero?  A net-zero home is one that produces as much energy as it consumes over the course of a year. Net metering helps get you closer to net-zero by allowing you to send excess electricity generated from your solar panels back out onto the electric grid.

We have many solar customers who have net-zero homes in North Carolina and South Carolina. Typically, in the summer, their solar panels generate more electricity than they need and they receive a net credit from Duke Energy for that excess energy. During the winter months when their solar production is lower, they still use some of the net-metered electricity from the grid to help offset their bills.

What are the benefits of net metering?

Net metering is a simple, fair policy that has helped many homeowners across the country go solar. The net-metered system owner gets full credit for all of the energy they produce, and only pays their utility company net energy usage (the difference between what your home consumes compared to what it produces).

The benefits include:

  • Your solar panels can generate clean electricity on-site: During times when you’re producing more than you’re consuming, the excess electricity is sold back into the grid at retail rates. This can also result in financial savings by avoiding having to buy power from traditional sources during peak hours or expensive months like summertime for customers with time-of-use and/or critical peak pricing schedules.
  • Solar energy helps reduce reliance on fossil fuels: Net metering helps fight climate change by reducing greenhouse gas emissions from traditional fossil fuels.
  • Excess electricity saves you money: Net metering can save money on electric bills. In some cases, homeowners have been able to offset their entire electricity bill.

Interested in a solar power system?

If you’re interested in a solar energy system for your home but aren’t sure where to start, our experts at Renewable Energy Design Group can help. We can answer any questions you may have about net metering, solar panels, and how a solar energy system may benefit your home or business. We offer you easy and affordable ways to go solar with net metering. Call 877-520-SOLAR to speak with someone immediately, or fill out the form on our contact page to reach us via email.