Net Metering Explained

Net Metering explained (NEM) talks about the billing process a homeowner’s utility uses when solar or another renewable energy source is added to their home or business.

net metering explained

Net Metering is the billing process with the utility to get full retail credit for all electricity generated by the solar system.

Net Metering (NEM) is a billing process that credits solar energy system owners for the electricity they add to the grid. NEM allows utility customers, who generate electricity, to use the electricity anytime, instead of only when it is generated. This means that a home or business can generate power during the day from a solar panel system and get kWh (kilowatt-hours) credited to be used at night or any other time they may need it. Credits are totaled each month by the utility and credits generated in low usage months may be used in higher usage months. 

Net Energy Metering is performed on a 12-month billing cycle and there is an annual true-up. Your annual true-up bill depends on when your net metering cycle begins and ends. Typically, the utility will send a statement each month with a projected total if the 12-month cycle ended at that month. These statements will show you how much energy is consumed and how much energy is generated. The amount generated will be subtracted from the amount consumed and that will be your net consumption or generation for that month.

However, what is the difference between net metering 1.0 and net metering 2.0?

To learn more about Net Metering, visit our full page for more details.