A utility rate scheme known as net metering, also known as net energy metering or NEM, compels your electric company to acquire the surplus solar energy that your solar panels produce at the full retail rate of power.
As a result, if your home's solar energy system generates more power than is needed, you can sell the surplus to the power company and get paid by the utility. Installing solar panels on your roof might save you so much money because of net metering. In fact, states with favorable net metering regulations, rather than those with abundant sunshine, are the best places to put solar panels. Now is the time to contact a solar panels consultant to install a solar energy system in your home.
Let's go deeper into how net metering can quickly return funds to your wallet.
What Is Net Metering?
Homeowners that generate electricity from solar panels and feed some of it back into the grid are eligible for net metering, a method of accounting that ensures they are fairly compensated for their efforts. If you're like the majority of working-age Americans, you probably spend Monday through Friday away from home, juggling the demands of a job or career. When solar panels are installed, the energy they produce is used to run the home. However, your house probably isn't consuming much power while you're at work from 9 to 5. So, where does all that solar power go? This is where net metering comes into play since the energy is fed back into the grid.
How Does Net Metering Work?
In simple words, net metering allows you to keep the entire monetary worth of the solar energy your panels produce by providing you credit for the electricity you return to the grid and offsetting any future electricity you may draw from the utility. With a sufficiently enough solar array, you may be able to completely do away with your regular electricity bill.
If you want to maximize your solar panels' output, the best time to use them is in the afternoon. The difficulty is that you use the least amount of electricity in the middle of the day. Therefore, at this time, your solar panels are producing far more energy than your house actually requires.
When a home's solar panels generate more energy than is needed, the extra juice is fed back into the power system. Here's where 'net metering' comes in handy. Your utility will credit your account for the full retail value of the power produced by your net metered system when your solar energy exports cause your electric meter to spin in reverse.
Then, when your solar panels aren't producing any power, you plug into the grid and run a positive electric current through your home. The phrase "net metering" refers to the fact that your utility company will calculate your final bill based on the difference between the amount of electricity you used and the amount you supplied back to the grid at the conclusion of the billing month.
Benefits of Net Metering
Customers who produce their own electricity in a clean and efficient manner might benefit more from the investment made in rooftop solar panels through net metering, resulting in a decreased annual electric cost. Some of the net metering's most notable advantages are listed below.
Reduce Pressure on the Grid
Reduced strain on the electric grid distribution system is a major benefit of residential solar panels for utilities (and their customers). Few people directly draw power from the grid because solar homeowners are using their own electricity instead.
Moreover, when a solar system produces more energy than it needs, the extra juice is fed back into the grid and used by other utility customers who don't have solar panels. The load on utility power plants is reduced even further. In states like Florida, where heat waves are becoming more frequent, and companies are struggling to keep up with electricity needs, reducing grid stress is more vital than ever.
Shorter Payback Periods
Full retail net metering is associated with significantly shorter payback periods. This is due to the fact that solar panel owners can expect greater savings on their electricity bills, allowing them to return their initial investment more quickly.
For instance, the payback period for a solar power system in the state of New Jersey would be between four and five years, thanks in large part to the practice of net metering. But since South Dakota does not have any kind of net metering in place, a system there could take up to 12 years to pay for itself.
Your solar system's payback period will also be affected by factors other than net metering. The time it takes to break even on your solar panels will depend on a number of factors, including the size of your photovoltaic system, the cost of your installation, the quantity of electricity you use, and the solar incentives and rebates in your area.
Utility Bill Savings
Net metering mostly benefits solar homeowners because of the reduction in monthly electricity costs. Net metering can save you tens of thousands of dollars throughout your solar panel system's lifetime. As we said before, solar power consultants can customize solar panel systems to cover a customer's whole energy payment for a given billing cycle. However, net metering can't do rid of the set rates that are usually included in an electric bill.
Does a Net Metering Credit Rollover from One Month to the Next?
Although it varies by provider, most full-retail net metering plans allow unused energy credits to roll over into the following billing cycle. If you produce more energy than you consume in a given month, you can carry over the surplus as net metering credits to use against your monthly grid usage the following month.
In the summer, when the days are longer, and the weather is better, you're more likely to have more credits. These credits can be saved up over the summer and applied to your electric bill in the colder months.
Your utility's true-up policy, also known as how often they buy out credits, is typically outlined in their net metering policy, as is how and if credits can transfer over from month to month.
Which Cities Has Net Metering?
Technically, net metering is mandated in Washington D.C. and 38 states. Of the 50 states, 29 mandate some form of retail net metering, while 17 provide alternate net metering options. Furthermore, while it is not required of them to do so, several of the largest utility providers in Idaho and Texas do provide net metering to their home solar clients.
Only Tennessee and South Dakota do not have any alternative net metering or net metering standards in effect. The isolation of these states, however, may not last forever. Companies around the United States have been battling to eliminate net metering systems in an effort to lower residential customers' solar savings and boost their own bottom lines. South Carolina and Louisiana are two states where companies have succeeded, and even solar-friendly California plans to implement net metering modifications. There was a recent attempt to eliminate net metering in Florida due to a bill that passed the legislature but was ultimately vetoed by the Governor.
Go Solar to Get Benefits of Net Metering
Let's be frank: net metering has seen better days. And there is less hope for net metering in the future. However, net metering is under attack from electric utility corporations that are trying to protect their profit margins at the expense of solar energy users.
According to solar power consultants, you should adopt solar as soon as possible if you want to maximize your savings through net metering. There is a possibility that your provider will discontinue the program if you wait, resulting in smaller total savings for you.
Consult Emerald Sun Energy to better understand how much money you could save by installing solar panels. In order to help you decide whether or not solar is a good investment for your home, our solar power consultant in Orlando may use data from local installers to offer you a customized estimate of not only your solar savings but also the cost of a solar installation.