What is Net-Metering and How Does it Work?

About Net-Metering and Solar

Net-metering is a billing mechanism that guarantees home and business owners that generate their own electricity with solar energy systems can benefit from the solar energy they produce even when their system is unable to produce electricity.  The majority of people who are switching to solar today are installing what are called “grid-tied energy systems”. 

This means that their solar panels become their primary source of power, but they are still connected to the energy grid so they can purchase electricity from the Utility on an as-needed basis.  Net-metering is the number one concept that has reduced the cost of transitioning to clean, solar energy.

Advances in Solar Storage

In years past, solar energy systems required batteries to store any excess energy being produced by the system at any given point in time.  This stored energy could then be used when the system is not meeting the needs of the home or provide a limited supply of electricity during a power outage.  Although battery technology has greatly improved and costs have come down over recent years, battery storage is still an expensive component that can increase project costs anywhere from 25% to 50% or greater depending on the size of the system and the storage capacity of the battery. 

Net-metering has enabled solar energy users to avoid the cost of batteries, while still benefiting from the excess energy produced by the system.  Rather than excess energy in a battery on your property, you can send that excess energy to the grid in exchange for credits from your Utility.  Essentially, you can use the grid as a battery of sorts; you are simply storing credit with the Utility instead of storing electricity on your property. 

Utilities such as Dominion Energy and Northern Virginia Electric Cooperative (NOVEC) provide a 1:1 credit for any excess electricity that solar energy customers send to the grid.

Net-Metering in Action

For example, let’s say in a given month your solar system produced 1,000-kilowatt hours (kWhs) of electricity, but you only consumed 800-kilowatt hours.  You would have created a credit of 200 kWhs that can be applied to future utility bills when your system’s production was unable to keep up with your home’s demand. 

In this scenario, you would be able to rely on the Utility grid to supply the remaining needs of your home and work off any credit you have built with the Utility before coming out of pocket.  Your credits can roll over from month to month until they are used up or you come to the end of your annual 12-month net-metering billing period.  Think of net-metering like a bear preparing for hibernation.  In the spring and summer months, the bear will gorge itself to build up as much fat as possible and use those fat reserves to sustain itself through the cold, dark winter. 

Prospect Solar Your Net-Metering Solution

Net-metering gives solar energy customers more control over their energy bills by allowing them to generate their own energy cleanly, efficiently, and most importantly, cost-effectively.  If you are curious about how you can take advantage of net-metering by switching to solar energy, contact us at 703-444-2447 or email us at info@prospectsolar.com and our team of experts can walk you through the details for your home or business specifically.

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