Net Metering Is a system in which solar panels or other renewable energy generators transfer surplus power onto the electricity grid, allowing customers to offset the cost of power drawn from the utility.

Net Metering with Solar

The charts below illustrate how Net Metering works with a solar PV.  When the sun’s shining the solar facility generates more energy (red curve) than you consume.  This excess energy spins your electric meter backwards as electrons are fed back on to the grid.  The utility records a credit, which is then used to offset your electricity bill when your electric consumption exceeds generation… after the sun sets.

Daily net metering

Net Metering with Solar allows you to use the Grid like a bank, lending excess daytime energy to the utility until you need it at night

Some have likened Net Metering to a virtual battery because it appears you can “store” energy credits on the grid until you need them.  But Net Metering is more like a bank than a battery – in fact you are lending surplus energy to the utility, which pays you back when you need it from the grid.  And if you design your renewable system well, you can “lend” at high rates and use those bill credits to buy back energy when it’s cheap.

Solar is particularly good at creating these Net Metering economies, precisely because it generates energy when it’s most needed and expensive.  The chart below plots a typical solar generation profile against summer pricing for four common commercial rate schedules in Pacific Gas & Electric territory.  Solar generates energy when it is most expensive, so excess energy can be credited at peak rates.  Those credits can then be used to buy cheaper energy back at night.

Net Metering with Solar allows you to buy low and sell high.

Net Metering with Solar allows you to buy low and sell high.

For example in the A6 rate above (the green line), excess generation could be credited “on-peak” at $0.54/kWh; these credits might then be applied against grid-purchased electricity costing as little as $0.14/kWh.  Well designed solar facilities coupled with Net Metering policy allow you to buy low” and “sell high”.