Like roll over minutes on your cell phone bill, net metering allows a renewable customer’s electric meter to “spin backwards” ensuring that they receive fair credit for valuable clean power they put back on the grid.
There are times when a customer’s solar array or other renewable energy system produces more electricity than is needed on-site. That valuable power is put onto the grid for use nearby where it is needed.
Net metering ensures that electric customers who generate their own power get credit for each kilowatt-hour of excess electricity they deliver to the grid. These credits can then be used by the customer to offset power they purchase from the utility at other times. In other words . . . When they generate more than they need: they get net metering bill credits. When they need more than they generate: they can use those credits to lower their power bills. This simple billing arrangement can make a significant impact on the economic viability of an investment in renewable energy.
Net metering best practices have evolved to include virtual net metering, meter aggregation and other innovative community solar models that go beyond the traditional on-site relationship between the meter and the renewable energy system. These newer models are designed to allow greater flexibility and empower more energy customers to participate in the new energy economy.
State lawmakers and utility regulators generally set the rules for which types of renewable energy systems get net metering credit and how they’re credited. Net metering programs should be as inclusive as possible and ensure fair retail credit for power produced.