How Does Net Metering Work?

New to Solar? Let's Start with the Basics

A solar energy credit system

Most solar installations are grid-tied, where utilities serve as a bank to absorb excess kilowatt hours produced by solar panels. Utilities count and credit the electricity generated by solar to the building owner, and excess energy that doesn’t get used right away redirects to other buildings tied to the grid in an automated billing process known as “net metering.”

The step-by-step process:
Solar panels produce energy during daylight hours, when homeowners usually don’t use very much electricity. When you have a grid-tied solar electric system, all unused energy produced by your panels during the day goes back into the grid, which acts as an unlimited battery source that will feed electricity to your home later, such as when you turn on lights at night.

Think about net metering as rollover minutes. This mechanism works well not only for daytime and nighttime usage; it also comes in handy when panels overproduce in the summer and absorb less sunlight in the winter months. Whatever electricity you don’t immediately use goes to the utility, and the utility rolls over those excess kilowatt hours so that you can cancel out your electric bill even when the sun isn’t shining. If you use more than what your solar array produces, you will pay your utility company directly at their current rate.
The meter in your building is what keeps track of both your electricity consumption and production. Despite this integrated system, many are surprised to learn that homes with solar net metering will lose power during a blackout just like a neighboring home that does not have solar.

Since electricity travels both ways on a net-metered power line, when the line goes down and needs to be repaired, electricity flow ceases and thereby ensures that a repairman can safely fix the broken links. For this reason, many homeowners who choose to go solar also take additional steps to protect their energy with in-home battery backup.