Net metering is one of the most popular solar incentives ever created. Unlike tax credits or rebates (which provide one-time benefits), net metering delivers on-going dividends over the entire 25+ year lifetime of your solar installation.
But what is net metering? And more important, what benefits do you—the system owner—receive from this solar incentive?
Net Metering Defined
The exact steps vary from state to state, but the overall process is fairly straightforward.
Under net metering, solar customers are allowed to sell excess clean electricity to the local utility company at a profit (usually as monthly credits—not cash). During the installation process, your solar PV system comes with a bidirectional meter:
- When you buy electricity from the utility company, the meter runs in one direction
- When you sell electricity into the grid, the meter runs in the opposite direction
At the end of each billing cycle, you’re only responsible for the “net” difference in electricity bought and sold.
Let’s look at some of the key benefits of net metering.
Net Metering Benefit 1: Higher Monthly Savings
Going solar will immediately reduce your utility bill (starting on Day 1). But because net metering allows you to sell electricity into the grid, it’s possible to have $0 utility bills every month. This is especially true if you implement a few simple energy efficiency strategies to reduce your electricity consumption.
In fact, some lucky solar customers receive negative electricity bills from their local power provider. Just imagine the utility company owing YOU for a change.
Net Metering Benefit 2: Free Nighttime Energy Storage
Thanks to net metering, you don’t have to invest in nighttime battery storage (which can be quite expensive). The entire utility network acts as virtual storage:
- The grid collects your installation’s excess electricity during the day (when solar panels work at peak performance and utility rates are at their highest).
- The utility grid feeds that clean electricity back into your property at night (when your panels stop working and utility rates are at their lowest).
No extra hardware required. No additional costs involved.
Net Metering Benefit 3: Shorter Payback Periods & Higher Returns
Arguably the biggest benefit of all? Net metering speeds up the payback period (and boosts the ROI) of your solar investment. You’re not simply “saving” money. You’re actually monetizing your excess electricity.
This makes it easier to recoup upfront costs and enjoy decades of truly free, clean electricity.
The Future of Net Metering in the US
Net metering is undoubtedly the most successful solar incentive in the United States. But the program is not without its critics. Many utility companies dislike the idea of buying electricity from their customers, and they continue working tirelessly to scale down and even destroy this solar incentive altogether.
In markets where they’ve succeeded, current net metering users are grandfathered into the program. Latecomers aren’t so lucky.
This trend merely highlights the importance of taking advantage of solar incentives before they expire. The sooner you go solar and apply for net metering, the greater your chances of enjoying the benefits outlined above.
Fortunately, net metering is free to join in most states, and enrollment comes standard with all Direct Energy Solar installations.
To learn more about net metering in your state, contact us today for a free consultation.