Net metering is a billing arrangement that allows residential and commercial customers who generate their own electricity—typically through solar panels or wind turbines—to receive credit for the excess energy they produce and send back to the grid. Here’s how it works in more detail:
### Basic Concept
1. **Energy Production**: When you install a renewable energy system, such as solar panels, they generate electricity. During sunny or windy days, your system may produce more electricity than you actually use.
2. **Energy Use**: When your system produces less energy than you need, such as at night or during cloudy weather, you can draw electricity from the grid.
3. **Metering**: A special meter tracks both the electricity you consume from the grid and the excess electricity your system sends back to the grid. This is where the term "net" comes in—it's the difference between what you use and what you generate.
### How Net Metering Works
- **Credits for Excess Energy**: If your system generates more electricity than you use in a given billing period, the excess energy is sent back to the grid. You receive credits on your utility bill for this excess power, usually at the same rate you pay for electricity. This can significantly reduce your energy costs.
- **Carrying Credits Forward**: If you generate more power than you use over a month, you may carry over those credits to future bills. This means that on days when your energy production is low, you can use these credits to offset your electricity costs.
### Benefits of Net Metering
1. **Cost Savings**: By generating your own energy and receiving credits for excess production, you can lower your electricity bills significantly.
2. **Incentive for Renewable Energy**: Net metering encourages the use of renewable energy sources by making them more financially viable for homeowners and businesses.
3. **Environmental Impact**: By increasing the use of renewable energy, net metering contributes to reduced greenhouse gas emissions and less reliance on fossil fuels.
### Considerations
- **Policy Variability**: Net metering policies vary by state and utility company. Some places offer favorable terms, while others may have limits on the size of systems eligible for net metering or the amount of energy that can be credited.
- **Grid Contribution**: When you send excess energy to the grid, you're essentially contributing to the overall energy supply, which can help stabilize the grid, especially during peak demand periods.
- **System Size**: The size of your renewable energy system can impact how much you benefit from net metering. A larger system may produce more excess energy and yield more savings.
### Conclusion
Net metering is an essential tool in promoting renewable energy use by allowing individuals and businesses to offset their energy costs while contributing clean energy back to the grid. Understanding your local net metering policies can help you make informed decisions about investing in renewable energy systems.