Net metering is a billing arrangement in which every kilowatt-hour your solar panels send to the grid offsets a kilowatt-hour you later buy from your utility, at the full retail price. Your meter effectively runs backward when you export. Credits usually roll over from month to month, and any surplus left at the end of a yearly true-up is paid at a lower wholesale or avoided-cost rate, or forfeited. Because exports are worth as much as the power you buy, net metering makes it simple to size a system to cover your yearly use. Several states have replaced it with net billing for new customers, where exports earn less than retail. Check your utility's current tariff, since the rules depend on when you apply.
Related terms and pages
- Net billing: Billing in which exported solar is credited at a rate below what you pay for power.
- True-up: The annual settlement of solar credits and charges under net metering or net billing.
- Customer Benefit Contribution (CBC): A monthly per-kW charge New York solar customers pay under Phase One net metering.
- Net metering by state