Net Metering

Net metering is an electricity policy for consumers who generate their own electricity. It allows them to sell the excess electricity produced by their solar electric systems back to the utility company.

Net metering programs serve as an important incentive for consumer investment in renewable energy generation. Net metering enables customers to use their own energy generation to offset their consumption over a billing period by allowing their electric meters to turn backwards when they generate electricity in excess of the their demand. This offset means that customers receive retail prices for the excess electricity they generate. Without net metering, a second meter is usually installed to measure the electricity that flows back to the provider, with the provider purchasing the power at a rate much lower than the retail rate.

Net metering is a low-cost, easily administered method of encouraging customer investment in renewable energy technologies. It increases the value of the electricity produced by renewable generation and allows customers to "bank" their energy and use it a different time than it is produced giving customers more flexibility and allowing them to maximize the value of their production. Providers may also benefit from net metering because when customers are producing electricity during peak periods, the system load factor is improved.

In the U.S.A., as part of the Energy Policy Act of 2005, under Sec. 1251, all public electric utilities are now required to offer net metering on request to their customers:

"(11) NET METERING.—Each electric utility shall make available upon request net metering service to any electric consumer that the electric utility serves. For purposes of this paragraph, the term ‘net metering service’ means service to an electric consumer under which electric energy generated by that electric consumer from an eligible on-site generating facility and delivered to the local distribution facilities may be used to offset electric energy provided by the electric utility to the electric consumer during the applicable billing period."

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