What is Net-Metering?
Aerial photo by Michael Fredericks, Sugar Hollow customer.
If you’re new to the concept of solar energy, one of the most difficult pieces of the puzzle to understand is how installing a solar energy system actually saves you money. We all know it’s great for the environment. We know that the sun is a completely free source of energy. But, what can be tough to make sense of is how solar energy reduces your monthly electric bill. The process, called net-metering, is actually pretty simple and straight-forward.
Wouldn’t you love to see your electric meter run backwards each month? That’s how net-metering works. The process is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, your home’s rooftop system may generate more electricity than the home uses during daylight hours. If your home is net-metered, your meter will run in reverse on bright and sunny days and actually provide a credit against what is consumed at night or other periods when your electricity use exceeds your system’s output. Since you’ll still need to use the grid at night and on cloudy days, you’ll still have a bill from the power company each month. But, you are only billed for your “net” energy use each month. The extra electricity that is generated by your home or commercial solar energy system is used to supply power to your neighbors and the surrounding community.
Before net-metering, your solar energy system would have used batteries to store the energy it created. Batteries were expensive, required regular maintenance, and had to be replaced after a set number of years. Now, with net-metering, your home or business can be battery free – saving you time and money over the life of the system.
Net-metering allows you to create your own electricity – cleanly and efficiently. And, it helps reduce your reliance on the grid and your monthly energy bill. Want to know something that’s even more cool about net-metering? The process actually helps to keep the electric grid safe for everyone and minimizes the total number of power plants that are needed by reducing the strain on distribution centers during peak times and enabling the power created from your home or business to offset an increase in demand from your neighbors. Long term net-metering can also help reduce the amount of energy lost in long-distance electricity transmission. And, studies also show that net-metered homes and businesses are much more aware of their electricity usage and reduce their usage, overall.
Like most things, net-metering isn’t all happy go lucky. Some opponents of net-metering argue that crediting solar energy owners for the energy they generate for the grid is unfair because the rate net-metered homes and businesses are credited is higher than the rate most utility companies pay for electricity at their wholesale cost. There’s also the issue of a home or business owner making money off the power company by producing more than it needs during a given time, although most states have eliminated this problem by putting a cap or limit on the amount a customer can offset their home’s energy usage through net-metering. Others say that net-metering creates an unnecessary strain on the administrative services of the power company, causing them to hire more staff and raise prices for everyone.
Our team at Sugar Hollow Solar is ready to discuss your specific needs and talk to you about how net-metering may or may not be the best option for your home or business. Contact us today!