You may think that solar power only benefits those who install solar panels on their homes, slashing their utility bills or even eliminating them entirely. But, did you know that those with solar panels actually contribute significantly to their entire community? Welcome to the world of net metering, a lesser-known benefit of solar energy that positively impacts not just solar adopters, but also their neighbors who solely depend on traditional fossil fuels for home energy.
By, Laureen Peck
What exactly is Net Metering?
In simple terms, net metering allows residential and commercial customers who generate their own electricity from solar power to feed electricity they do not use back into the grid.
Since today’s solar systems are all tied to the grid, if a solar-powered homeowner generates more electricity than they use, the excess goes back to their utility company, spinning the meter backward and giving them a credit for the electricity the solar panel system generated.
Net metering’s billing mechanism then credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a PV system on the home’s rooftop, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods where the home’s electricity use exceeds the system’s output. Customers are only billed for their “net” energy use. This is how many solar-powered homeowners end up paying nothing to their utility for their electricity.
Three Ways Net Metering from a Solar-powered Home Benefits Everyone in the Neighborhood:
- Saves Money for the Entire Neighborhood: The exported solar electricity serves nearby customers’ loads, effectively slashing monthly electric bills for both energy-conscious customers and their higher-consuming neighbors.
- Less Power Outages: Solar power users feed extra electricity back to the grid. This offloads the utility companies from infrastructure stress, reducing the likelihood of blackouts and power outages caused by repairs and upgrades.
- Safer Community: Our electrical power grid is aging, and additional stress is added to it due to climate change that makes storms stronger and summers hotter. There are also rising concerns about terrorism including threats of cyber-attacks. The current grid is so dated and over stressed that the utility industry will need to spend billions of dollars to update it and keep it secure.
By expanding the power sources to include more distributed solar energy, a catastrophic weather event or attack will be less likely to take out the entire system at once making the system safer and potentially saving the economy billions of dollars in expenses to repair and rebuild.
Neighbors of Solar-powered Homeowners Benefit from More than Net Metering Alone
Homes that run on sunshine generate zero toxic emissions while reducing pollutants that come to the community from fracking and burning fossil fuels. This helps protect the health of the families that live in that community while reducing their healthcare costs.
In addition, every person who runs their home on solar power also helps reduce our dependence on foreign oil. Solar helps diversify our energy supply. This helps to ensure the source of our power is reliable and the pricing remains consistently affordable. And as the industry continues to grow, so do the jobs available to the communities it supports.
Whether you have solar panels or not, you benefit from those neighbors who do. Your air and water is cleaner, your local electric company is stronger and your community has more economic benefits and independence. Solar power is good for everyone.
What Happens If Your State Doesn’t Support Net Metering?
While the benefits of net metering are clear, not all states currently have policies that support this approach. If you live in one of these states, you might be wondering, how are you compensated for your solar energy contribution.
In such regions, the compensation for any excess energy your solar panels produce is typically based on the concept of ‘avoided cost.’ The avoided cost represents the rate your utility company would have had to pay to generate that same amount of electricity or purchase it from another source, which is often at the wholesale cost.
For states that do support net metering, laws frequently require utility companies to purchase any excess power from homeowners at the same retail price the homeowners would pay for electricity drawn from the grid.
The price set for excess solar energy fed back to the grid can vary widely from state to state. It’s important to understand your state’s specific regulations when considering solar power for your home.
Do Net Metering Credits Expire?
You might wonder, what happens if your solar panels produce more energy than you need? In most states, the answer lies in the beauty of net metering credits. These credits typically roll over from month-to-month and sometimes even from year-to-year. So, you won’t have to use all of your credits in a single billing period.
Think of it as your personal solar savings account. During summer, when your solar energy system is likely producing a surplus of energy, you can ‘deposit’ these extra credits. As you head into winter, when solar generation may decrease due to shorter days, you can ‘withdraw’ from your saved up credits to offset your utility bill.
The rules for net metering credits can depend on where you live, so it’s crucial to familiarize yourself with your local policies.
Could Solar Be Right for You?
With all these benefits, it’s worth asking – could solar be the right choice for you? Don’t hesitate to find out how you can contribute to and benefit from a solar-powered community.
Solar power has a lot of great benefits. To find out if going solar would be right for you, please fill out the form below. We offer no-contact, no-cost, customized solar estimates.
