What is Net Metering?
Net metering is a billing arrangement that allows solar homeowners in the US to receive credits on their electricity bill for surplus energy they send to the grid. When your solar panels produce more electricity than you're using, the excess flows back to the grid and your meter effectively runs backward.
Net metering policies vary significantly by state, with some offering full retail rate credits and others using lower avoided-cost rates. Understanding your state's policy is crucial for calculating your solar savings.
How It Works
- 1.Your solar panels generate electricity during the day
- 2.You use what you need in your home first
- 3.Surplus electricity flows to the grid
- 4.Your meter records the net difference
- 5.You receive credits on your electricity bill
How Net Metering Billing Works
Under net metering, your electricity bill reflects the “net” difference between what you consumed from the grid and what you exported. In months where you generate more than you use, credits roll over to future months.
True-Up Period
Most utilities in the US operate on an annual “true-up” cycle. Credits accumulate throughout the year and are settled at year-end. If you have excess credits at true-up, compensation depends on your state — some pay wholesale rate, others forfeit unused credits.
Net Metering by State
| State | Credit Rate | System Cap | Status |
|---|---|---|---|
| California | Avoided cost (NEM 3.0) | No cap | Revised |
| New York | Value of Distributed Energy | 25 kW | Active |
| Texas | Varies by utility | Varies | Utility-specific |
| Florida | Full retail rate | 2 MW | Active |
| Massachusetts | Full retail rate | 10 MW (aggregate) | Active |
| Arizona | Export rate (~75% retail) | No cap | Revised |
Important: Net metering policies change frequently. Check with your utility and state public utilities commission for current rules.
Billing & Credits
Summer Months
Credit Builder
High generation builds credits for winter use
Winter Months
Credit Use
Lower generation offset by accumulated credits
Annual True-Up
Settlement
Excess credits settled at end of billing cycle
Alternatives to Net Metering
Battery Storage
As net metering rates decline in some states, battery storage becomes more attractive. Storing surplus energy for evening use avoids the gap between retail and export rates.
Self-Consumption Optimisation
Scheduling high-consumption appliances (EV charging, dishwasher, laundry) to run during peak solar hours maximises the value of your generation, regardless of net metering rates.
Ready to Start Earning Credits?
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