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Does Your State Have Solar Net Metering?

One of the many advantages of solar energy is the idea that you can deposit cash or credit when you generate excess energy.

It’s called net metering or net billing, and not all states or utilities offer it.

Each state has its own policies around net metering, which can make it difficult to evaluate what exactly net metering means for you. And those policies are changing, with California’s recent policy change having major ripple effects throughout the rooftop solar industry.


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With net metering, solar panel owners can offset their energy use by transferring the excess energy they generate to their utility’s electrical grid. In some cases, electricity customers enrolled in net metering programs can save or earn money on their electricity bill when they generate more energy than they need to power their home.

To help you understand what net metering is, we’ve answered the most important questions you need to know as you research net metering policies in your area.

Here are the basics of net metering: what it is, how to get it, and how to know if your state has it.

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What is net metering?

Net metering is a general term for the practice of compensating solar panel owners for the excess energy they generate. If you are connected to a grid and have solar panels installed on your home, there will be periods of time when you can power your home exclusively with your solar panels and periods of time when you will need to go off the grid to power your home.

And there may be times, according to Ben Delman, director of communications for Solar United Neighbors, a solar energy cooperative, when “during the day, you’re at work and you don’t have any lights on, there’s nothing working in your house.” . home. “The sun is shining (and) you’re sending electrons back through your electric meter.”

In these situations, net metering is “a fair credit system that allows solar owners to get credit for electricity they generate but don’t use themselves,” Delman said.

Your utility will look at how much energy you’re pulling from the grid and how much you’re giving back, and then credit you for the energy you’ve sent to the system. If you provide more energy to the grid than you use, these credits can reduce your energy bill.

While most states have net metering laws, policies differ from state to state and even company to company. Some states set a limit on the amount of credit you can receive for your extra electricity. Others allow the credits you generate to be carried over from month to month. Some states even have net metering policies that only apply to certain types of utilities, while other states have net metering policies that apply to all utilities in the state.

Here’s a look at each state’s type of net metering policies and which ones don’t have any.

Net metering by state

Note: These net metering policies are for residential electricity customers only and are accurate as of August 18, 2023. Since programs, policies and laws can change frequently, it is best to follow up with your local government, utility or power supplier to confirm.

How is net billing different from net metering?

Net billing works similarly to net metering: the main difference is a lower compensation rate for excess energy. You still send excess electricity to the grid and your utility company credits you for it.

But there is a problem. Net metering provides the retail value of electricity, essentially what it costs on the open market, Delman explains. With net billing, you get the wholesale value — the cost at which the utility buys the power, he said.

Since net billing credits you at a lower rate than net metering, Delman believes some utilities are adopting net billing instead of net metering as a way to save costs.

Each state and utility company will have different regulations and policies for the practice. As with net metering, contacting your local utility company is the easiest way to get the information you need for your home.

A handful of states have adopted some variation of the net billing model, where customers receive a percentage of the retail price of electricity returned to the system. California, for example, adopted a new energy net metering program last spring. California’s previous program, called NEM 2.0, gave utility customers a credit for the full retail value of the energy they fed into the grid, essentially allowing them to buy back the power they fed into the grid at the price at which they sold.

Under the revised program, called NEM 3.0, utilities buy back power at a lower rate during daylight hours and at a higher rate at night. The California Solar Energy and Storage Association estimates that under NEM 3.0, the average compensation rate for solar customers would fall by 75%. One of the goals of the new net metering policy is to encourage people to use a solar battery to store excess energy instead of relying on the grid.

Generac solar battery in a garage on a sunny day

If net metering isn’t right for you, perhaps a solar battery is the way to go.

generation

What if my state doesn’t have net metering laws?

There are some states that officially do not have net metering. or a net billing law, but instead they have what’s called a solar buyback program. These programs work similarly to net metering and net billing. You are credited with the excess energy you generate with your solar panels and then send it back to the grid. The only difference is the rate at which you are paid, which will be different from each solar buyback program.

Sometimes it is not the state but a local utility that has a net metering policy, even if your state does not have official laws governing these policies. According to our research, every state has some type of net metering, net billing, or other solar buyback program, whether the program is controlled by the state or the utilities. Again, the best way to identify your specific net metering, net billing, or other solar buyback program is to contact your solar installer or local utility company.

However, in some cases, it might be more beneficial to invest in a solar battery and store the excess energy it generates for use during sunless hours of the day. If you want to learn more about solar batteries, check out this story on why solar batteries may be right for you.

“The important thing for consumers looking into solar is to make sure you ask good questions of your installer, and they should be able to guide you,” Delman said.

For more information on net metering and solar, check out this story on how to avoid too-good-to-be-true solar scams and how to estimate how many solar panels you need for your home.

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