What Is Net Metering?

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Net metering is the method the utility company uses for billing the power consumed and produced at your home or business that has it own renewable energy system. The utility only bills you for the Net energy consumed during the billing period.

Allow me to explain with an example.

Before Net Metering the utility company was required by federal law to purchase the power you generatred with your renewable energy system. However, the law didn't say how much the utility company would have to pay you for the power your system generated. When you bought power from the grid you paid a retail price, for example $0.15 per kWh. If your renewable energy system produced more power then your home or business was consumming it would sell this power to the grid. The utilities were only paying the "avoided cost" or $0.01 to $0.02 per kWh. With numbers like that it is hard to justify a grid connected system.

With Net Meterng in place, the utility companies have to pay you the same retail price for the excess power your system generates.

This actually simplified the billing for the utility companies. It most cases if you have a digital meter they remove it and give you the older style meter that has dials on its face. The digital meters require special programming to understand the power you are selling to the grid. Some digital meters without this custom programming will not reconize the power flow change in direction. They will continue to count up, not down when you sell them power. The older style meters will all change direction when you sell power back to the grid.

Net Metering is a state law. So each state is a little different.