© Courtesy of CNET How your utility reimburses you for your solar energy can affect your energy savings over time. jonathansloane/Getty ImagesIf you have solar panels on your roof , you almost certainly don't use all the energy they generate, and the excess goes into the grid to match your utility's power supply. If panel owners receive nothing in return for this extra energy, it will be harder to justify investing in solar panels. While storing a home battery can help you save energy that you don't use right away , there is an easier (and cheaper) option to correct this imbalance.
Net metering is the way utilities compensate you for the electricity you generate to ensure you get something for the solar energy you generate but don't use. Although net accounting is the most common and well-known compensation scheme, there are others. We'll explain them below to better understand how much money solar panels can save over a lifetime
The best solar companies of 2022: See them on CnetHow does net accounting work?
In states that offer net metering (check here to see if your state is eligible), you can sell excess solar power to your utility company to offset the cost of your energy use. If it's clear and sunny, you can generate a lot of solar energy, but if it's cloudy or raining, you'll see less energy than you need to power your home. By selling excess electricity to the grid, you can use credits to cover the electricity you need. In the end, you only pay for "net" energy, or the difference between what you sold and what you actually used.
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Explicit measurement type
Depending on your country and service provider, there are three different net metering models available.
Pure measurement
Net metering is more common and works by selling excess power generated by your solar panels to the utility operator in exchange for credits that offset the electricity you would otherwise use from the grid. The credit is applied to the retail tariff, which is the rate you pay for electricity. Only one meter is required to be metered, although you may need to refresh the meter if you go out into the sun.
Buy/sell everything
The buy/sell all model sells 100% of the energy generated by the solar panels to the utility company. It is sold at wholesale price, which is cheaper to buy. In return, you receive 100% of your home's energy from the utility company and pay a retail price for its use. This requires two separate meters and you will pay the difference between the amount generated and the amount consumed - if applicable. It is important to note that in this model you will not directly use the energy generated by your solar panels.
Clean invoice
Similar to net metering, the net charge model allows you to use the electricity produced by your solar panels and sell the excess to the utility at retail cost. Unlike the net accounting model, you cannot credit banks for future billing cycles. This arrangement is more common for commercial premises than for residential premises.
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What should be considered when choosing types of net accounting
In some cases, you may not have a choice about the type of clean energy metering system, as utility companies may only offer one option. However, if you have the option, you'll want to keep a few things in mind.
Net accounting is the most common option for one reason: it's the easiest to understand. You get credits for the energy you sell, and those credits are paid back at retail, meaning the same rate you pay for your own energy. This makes the calculation easier.
However, that doesn't mean it's the best deal available to you. If you're in a situation where you expect to generate a lot of electricity - in an area where it's sunny most of the time and there's no rain or clouds to interfere with the panels - then buy/sell them all. Either option can work well. Although you will be selling at a wholesale price that is lower for you, if you act as a supplier, you will sell much more than otherwise. All your solar production will be monetized from the surplus.
You should also consider other fees associated with net accounting. For example, you may have to pay a joining fee. This service is a monthly fee you pay to connect to the company's network. It's usually not much, $10 to $20 a month, but it's an expense worth considering.
Regardless of what works best for you, net metering is a great way to get the most out of your solar panels. It allows you to power your home or pay for all your electricity usage, but it also allows you to monetize your energy production and let others benefit from it.
