How does net metering work?

Customers who have their own generating facility (i.e. solar panels, wind turbines and microturbines) that qualify to interconnect with an electric company’s system have the potential to use net metering.

When the customer’s facility generates more electricity than the customer needs, the excess electricity turns the meter backwards. The reverse metering results in a lower meter reading by the electric company and a lower bill to be paid by the customer.

A customer can get a lower bill in two ways:

• The self-generation offsets the amount of electricity the customer would have otherwise purchased from the utility company; or

• The customer can feed electricity back into the electric company’s system and receive a credit for a future bill.

If a customer credit exists at the end of three consecutive billing cycles, a request may be made to the utility for a cash payment. The credit is limited to generation charges and does not apply to other charges like those for transmission and distribution.

Net metering is an option electric companies are required to offer their customers. However, limitations do exist. For example, utilities only have to offer net metering until the total power generated by customers reaches the 1 percent threshold of the company’s peak demand.

I want to get started

Net metering is a multi-step process that requires careful consideration. Here are the initial steps you’ll need to undertake:

1. Find out more about the process. The first step is to contact your local utility company. They can provide details about the technical requirements, the approval process, and how to obtain your net-metering agreement. Then…
2. Investigate your renewable energy options. And…
3. Determine what size system will suit your needs. In order to size your system, you will identify your individual energy requirements.

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