What is Net Metering?
Net metering is a billing program offered by your electricity utility company that allows you to receive credits when your solar energy system over produces and also use those credits when your solar energy system under produces. Simply put, the energy you produce, minus the energy you consume equals net energy.
Residential Rate Plans
Time-Of-Use (TOU) Rate Plans
Customers pay different rates based on the time of day. Electricity rates are lower on nights and weekends, but go up during peak hours
Tiered Rate Plan
Customers pay a single rate for a “baseline” amount of energy each month. Once that allotment is used, the rate climbs to a more expensive tier
Solar customers earn credit for energy they send to the grid during the day and then use that credit to offset energy they draw from the grid at night
How Does Net Energy Metering (NEM) Billing Work?
Net Energy Metering (NEM) works a little differently than other types of energy rates, so after you go solar and you're interconnected, your bill will have a new look. The NEM bill involves both credits and charges - as well as minimum delivery charges and any gas charges. Homeowners in the NEM program are automatically placed on a 12-month billing cycle.
Monthly statement: You will receive your net energy metering statement from your electricity utility every month. Every month you pay only for your monthly minimum delivery charges and any gas charges. Your meter is read monthly, and the net energy usage during each billing period appears as either a credit or a charge on your NEM statement. These credits and any charges are carried forward month to month for 12 billing months. The final amount is reconciled on your annual True-Up statement. Learn more about true-up bills.
How Will I Get Compensated For The Surplus Energy I Generate?
Before or at the end of your 12-month settlement bill, if you have generated more electricity than you used, you may be compensated in one of two ways*:
Net Surplus Generation will be paid as an on-bill credit. At this point, the account balance will be zeroed out and the new 12-month billing period will begin on the next regulary scheduled meter read date. Any credit can be applied to energy or non-energy charges. Some electricity utility companies will maintain your Net Surplus Compensation (NSC) credit indefinitely, until it is fully used, or until the account is closed. If your account is closed, any unused credits in your account will be returned in the form of a check to the mailing address identified on your account.
Before the end of your 12-month billing period, you may elect to receive a check throughthe mail for the value (dollar amount) of the net surplus energy, excluding any amount owed to your electricity utility company for other charges on your electricity bill. At the end of each 12-month billing period, your account balance will be zeroed out, and the new 12-month billing period will begin on the next regularly scheduled meter read date.
The Benefits of Net Metering
Net metering can save you, the homeowner, hundreds of dollars on your electricity utility bills every year, so it's not a bad idea to look into what going solar can do for you sooner rather than later.
As a NEM customer, you can receive Net Surplus Compensation (NSC). NSC is a credit for Net Energy Metering (NEM) customers. When your solar energy system produces more energy than you’ve used in aggregate over your 12-month billing period, your electricity utility company pays you for your “Net Surplus” energy with NSC.
There's another benefit from net metering. Since your solar energy system is powering your home with sunlight during the day, this reduces strain on the grid and the number of scheduled utility blackouts and outages from wildfires, high winds, and storms.