Guide to Net Metering

Net Metering: What Happens to Unused Solar Power?

One of the questions we get a lot is "what happens with unused solar power?" If a solar project is producing more energy than the home is using at the moment, where does all that extra energy go? Great questions, let's dig in!

system set up.jpegIf the solar photovoltaic system includes on-site battery storage, then the answer is simple: the extra energy gets stored in the batteries. However, not all solar champions opt for batteries. In those cases, unused power from these storage-less solar arrays will be automatically exported to the electric grid. This can earn the homeowner credit against future electric usage on later, non-sunny days through a process called net metering. 

At a glance, net metering allows you to:

  1. Track how much unused solar powered energy you send to the grid,
  2. Gain credit based on that amount,
  3. Use that credit to cover the cost of electric bills in later months 
Now let's dig a little deeper.

A grid-tied solar system is optimized so that it will produce the most solar power it possibly can, under all circumstances. The system is tied into your home's electric panel, and the first priority for any solar power is to be used by your home's electric loads: fridge, well pump, water or space heating, electronics, etc.

If you produce more solar power than you use (as will be the case for many customers during daytime hours, especially in summer) then your system will feed power out to the grid. This essentially treats the grid like a battery, "feeding" the grid with clean solar energy that reduces the load on the local electricity grid, which saves everyone money.  


Examples of exterior bi-directional meters.

Net Metering allows you to reap the benefits of every kWh of solar energy you generate. 

Net Metering, also known as Net Energy Metering, is a program through which you can track the credits for the surplus energy your system sends into the grid and use these credits to offset the cost of electricity that you might receive from the grid when your panels’ generation is not enough.

It’s important to know that Net Metering programs have different requirements and policies depending on the state you live in. We go into detail about the differences in the net metering programs in the three states we serve: Maine, New Hampshire, and Massachusetts. Be sure to read all the way to the end to get a full sense of how your state’s net metering will affect your solar project!

For a net-metered solar powered home, your electricity meter will record both the energy that flows into the house to be used as well as the exported electricity that flows out through the meter into the grid. This measurement is used to calculate a credit against what electricity is consumed at night or other periods when the home's electricity use exceeds the system's output. Customers are only billed for their "net" energy use.

Net metering programs vary from state to state. Generally, they allow exported solar electricity to the grid to appear as either dollar credits or kilowatt hour credits on your monthly electric bill. Simply put, if you produce 5 kWh of extra electricity, you will have 5 kWh worth of energy credit that you can use to offset your usage later on.

diagram showing how solar net energy metering works

Click on the diagram above to expand it.

In any given month, if you produce more solar electricity than you consume, your electric bill will reflect that excess. In most cases when a solar array is designed to offset your entire electric use, solar customers produce more electricity than they will use from spring until fall. In the winter months when the days are shorter and the sun is lower in the sky, solar customers will use their "banked" credits to offset wintertime electric bills. 

The many benefits of net metering programs affect both the solar homeowner as well as their neighbors and anyone who uses the grid (that’s just about all of us!). For the homeowner, net metering allows you to:

  1. Save on your electric bills;
  2. Increase your energy independence;
  3. Speed up your solar payback period. 

For others, net metering reduces pressure on the grid and lowers our dependence on dirty fossil fuel energy sources by sending clean, solar generated power into our grid.

Save on Utility Bills

Net metering allows customers to generate their own electricity cleanly and efficiently, and benefit from any unused solar generated energy. During the day, most solar customers produce more electricity than they consume; net metering allows them to export that power to the grid and reduce their future electric bills.

The graph below is an example of SolarEdge Monitoring for a system's production on a great solar day. Your home uses energy from the grid exactly as it does now (in red), when the sun strikes your panels, you produce your own power and self-consume it directly (in blue). In the middle part of a day, you will typically be producing more power than you need, the excess (in green) automatically flows back into the grid and powers your neighbors' homes. You receive credits for every kWh you send into the grid to cover the red and you can bank credits all summer to cover you through the winter!

net energy metering graph showing solar power generation

Build up your Energy Independence

Net metering allows you to use the grid like battery storage to “store” your excess generated power for future use. Aside from net metering, the only way to capture and use all the electricity produced by your panels would be to invest in solar battery backup to store excess solar. If you don’t have a solar battery, you can get the full value of your generated solar power.

Speed Up Your Payback Period

A solar payback period is the length of time it takes for the electric bill savings from your solar project to offset the initial cost of your installation. When you hit your solar payback mark, you’ve paid off your upfront cost and all energy produced by your system for the rest of its lifetime is free.

Net metering can shorten your payback period, especially if you live in a state with favorable net metering policies. Through net metering you can enjoy even more savings from your solar array by receiving monetary credits for every amount of solar power generated and putting those credits towards future savings.

Improve the Grid and your Community

We all know that all solar projects, large and small, reduce pressure on our overburdened electric grid by reducing the demand for electricity from the utilities. With more homes and businesses using electricity from their solar projects rather than from the grid, the utilities don’t have to transmit as much power through the grid (which is especially important when the grid hits peak demand and we have to rely on peaker plants for our electricity).

Through net metering programs, households with solar can share their excess electricity with their neighbors and reduce their community’s dependence on the grid. This decreases strain on the grid infrastructure and decreases our shared reliance on dirty fossil fuels.