What is Net Metering, and How Does it Work?

If you’ve signed up to install residential solar panels in NJ, or other states, you might encounter the term net metering. This system is a unique feature that homeowners can partake in that can let them use their solar panels for more than just powering their own home. Here’s everything you need to know about net metering for solar panels and the solar energy credits they can provide.

What Is Net Metering?

Net Energy Metering, also known as NEM, is a utility rate program that lets owners sell the excess electricity produced by their solar panels. By using the electric grid to store the energy produced by solar panels for later use, homeowners can save money on future energy usage. For example, rooftop solar panels typically generate the most electricity during the day while the sun is high in the sky. However, that’s the time of day when homes use electricity the least; homeowners are away at work and, if they are home, don’t need to turn on the lights if the sun is already shining brightly outside. Conversely, the hours of the day when electricity is most used is also when solar panels don’t generate electricity: at night. Net metering for solar panels allows homeowners to offset this balance by spending the solar energy they make during the day at night when they need it most!

By sending unused electricity back through the grid, homeowners can save money on future utility bills. For example, suppose a home’s solar panels generate more power than a home uses during a specific period of time. In that case, the additional energy is sent back through the grid to power other homes. In turn, this return of electricity into the main grid provides credits for the homeowner for their energy usage.

Net metering was initially created to encourage more homeowners to adopt solar panels in their homes, and most US states have passed some form of a solar energy credit system. However, these laws and procedures can vary by state. For instance, New Jersey supports both aggregated net metering, which lets a single customer offset electricity from numerous meters, and virtual net metering, which gives solar energy credits to homeowners subscribed to a local solar project.

How Does Net Metering Work?

To understand how you can receive solar energy credits, you should know the process of net metering for solar power. It occurs when your solar panels produce more electricity than you use up at any point during the day. When this happens, the excess electricity is sent back to the grid, which will make your electric meter run in reverse. 

At the end of a given period of time, such as a year, depending on where you live, you receive an electricity bill that’s the net of what you contributed to the grid and what you took from it. Essentially, it means that you pay less for your electric bill the more excess electricity your panels generate.

The Benefits of Net Metering

Net metering for solar panels has various benefits that homeowners can take advantage of after installing panels. Depending on your solar system’s size, you can generate enough electricity each year to match your usage. However, because the amount of electricity sent back to the main grid will vary based on seasonal changes, net metering can help you make up for these differences using the excess energy you produce. As a result, solar energy credits can help save you money on electric bills!

If you’re seeking to install solar panel snow guards to protect your home during the winter, call Impact Solar for help!