What is net metering?
Net metering or net energy metering (NEM) is a solar industry incentive to off-set your electrical consumption with photovoltaic (PV) production.
How does it work?
First, let’s break down the basics...sunlight hits your PV system. The solar panels generate electricity from direct current (DC) to alternating current (AC) through the inverter. A bidirectional meter tracks the amount of energy you are consuming and producing by spinning forward and backward.
The utility only bills you for the electricity you consumed, beyond what your solar energy system produced. If the PV production spins the electric meter backwards, you will pay less. You sell back at the same retail rate you buy electricity from the utility company.
Note: Capacity charges and PV interconnection fees can still apply.
What are the benefits?
• Reduces your future electric bills
• Creates electrician, installer, and manufacturing jobs
• Generates your own electricity cleanly and efficiently
• Increases reliability
• Allows utilities to better manage peak electricity loads
• Decreases the strain on distribution systems within the electric grid
• Prevents losses in long-distance electricity transmission and distribution
Does my state have net metering?
Net metering is mandatory in 40 states, the District of Columbia, and four U.S. territories. Idaho and Texas don’t have any mandatory rules, but some utilities allow net metering. Currently, only Alabama, South Dakota, and Tennessee don’t have NEM rules. Check out more information about net metering and your state’s policies and incentives at the Database of State Incentives for Renewables & Efficiency (DSIRE).