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Net metering is the easiest way to get ‘paid’ for the energy from solar panels — here’s how it works

“Only 20-40% of a solar energy system’s output ever goes into the grid.”

Net metering is the easiest way to get 'paid' for the energy from solar panels — here's how it works

Photo Credit: iStock

If you’ve considered installing a solar panels, you may have done the math on how much power you can generate. 

If you have, you’ll find that many systems actually produce more electricity than a home needs during the day, but less than enough once the sun goes down. For many of us, the answer to that math problem is net metering. 

What is net metering?

Net metering is a program in which a PV system’s excess power flows out into the electrical grid to supply nearby homes. The electrical company keeps track of how much power the home generates and gives that homeowner a credit. 

Then, when the homeowner needs to buy electricity from the company, such as at night or on days with little sun, the credit can help pay for it. This lowers a home’s electric bill and offers several other benefits.

Why is net metering important?

Electricity is difficult to store. Holding onto even a single day’s charge from a PV system requires expensive, bulky batteries. 

In the past, this put extra limits on who could install a PV system in their home. But having somewhere to send your extra electricity instead makes PV systems more affordable, convenient, and accessible.

At the same time, programs that compensate a household for the electricity it generates help offset the cost of keeping the house running at night, which was previously a drawback to solar. The setup also increases demand for solar installation and maintenance, which creates jobs. 

The program even has benefits for electrical companies. Transporting power long distances wears out equipment and results in power loss, problems which are minimized by having many smaller sources of power scattered across the grid and supplying their neighbors. At the same time, PV systems lower the local demand during peak hours, making it easier for the utility to keep up.

The Solar Energy Industries Association offers a more in-depth explanation on its website. 

“On average, only 20-40% of a solar energy system’s output ever goes into the grid,” the organization states. “There are a wide variety of cost-benefit studies around the country that demonstrate the value solar provides to local economies and the electricity system as a whole.”

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