Living in the era of renewable energy, solar power has emerged as a leading resource for creating clean and sustainable electricity. The on grid solar system has become popular among businesses and homeowners, and all due credit goes to the net metering system that has let it gain maximum attention.
Net metering is a policy that allows solar energy system owners to maximize the overall benefits of their investment.
But What exactly does net metering do, and how does it maximize your savings?
Read on as we put forward every other detail related to net metering, its benefits, types, and the way it works to save on your electricity bills.
What is Net Metering?
Net metering is a billing arrangement done between the utility company and the solar energy system owner. It lets the solar energy users send excessively generated electricity from their rooftop solar system to the grid, and then receive valuable credit added to their electricity bill.
This kind of process allows businesses and homeowners to make use of solar panel-generated electricity and hold on to the excessively generated electricity from the grid at the same time.
The stored electricity can be later utilized on days when the panels are not said to be producing due to cloudy weather conditions.
How Does Net Metering Work
Below, we discuss how net metering works and how it can benefit you.
- Solar Energy Production
During the daylight time, the solar panels generate electricity. If the system is said to be producing electricity more than the required consumption of a household, then it comes under excess energy. This excessively generated electricity is sent back to the utility grid itself.
- Credit and Metering
A unique meter, known as a bi-directional meter, tracks the electricity generated and consumed under a solar panel for home and the electricity that has been sent back to the grid due to overgeneration in one place.
For every kWh (kilowatt-hour) of electricity that is sent back to the grid, the system owner does receive a credit added to their electricity bill.
- Utilizing Credits
Once solar panel installation is completed, there will be times when it cannot produce the required set of electricity to run the home appliances. Such things happen mostly during the night hours.
The system owner can eventually draw and make use of the excessively generated and stored electricity from their grid at such crucial times. The credits earned out of sending excess electricity to the grid and utilizing them in the offset days can reduce the overall electricity bill to an extent.
- Billing Cycle
By the end of every rooftop solar energy billing cycle, the utility company shall calculate based on the net electricity usage. If most of the electricity consumption comes from the grid than the ones that are produced, then the system owner has to pay for the given difference.
If electricity production is more than their usage capacity, then excess credits get rolled over to the upcoming billing cycle or can be paid out, based on the net metering policy derived by the utility company.
Different Types of Net Metering
- Standard Net Metering
Standard net metering is the most prevalent form of net metering that lets homeowners offset their electricity consumption along with energy credits earned through excess power generation on a one-to-one basis.
This is a simple approach providing various advantages for homeowners, given its predictable energy usage patterns.
- TOU (Time-of-Use) Net Metering
Under TOU net metering, the electricity credits fluctuate based on the time of its generation. Electricity that has been generated during peak hours while the demand and prices are said to be the highest, brings in more valuable credits.
This kind of approach maximizes the cost savings on utility bills for individuals who can adjust to the energy consumption patterns according to their usage.
- Virtual Net Metering
Virtual metering system for installed solar panels for homes lets multiple users access the generated electricity. This kind of shared solar energy system comes in handy, as multiple tenants living in one apartment building can utilize the generated energy without having to rely on separate systems.
Credits generated through the solar panels get individually allocated to the participants, making net metering more accessible to individuals said to be living under an apartment type of house space. Individuals not having suitable roofs to complete individual solar panel installations can rely on virtual metering systems.
Benefits of Net Metering for Solar Panel Installation
- Financial Savings
Net metering lets the solar system owners generate, utilize, or send the excessively generated energy back to the grid. The credits received for surplus electricity production, and for feeding them to the grid significantly reduces the overall energy costs.
This can further lead to valuable financial savings on monthly utility bills, making solar power a wise investment.
- Grid Stability and Support
Solar systems said to be connected through net metering do contribute to the reliability and stability of the electricity grid. During high solar energy production days, the excess electricity gets fed into the grid, thereby reducing the strain on the traditional power plants.
Such a distributed approach helps in meeting the energy demands and minimizes them for having costly grid-based infrastructure upgrades.
- Energy Independence and Resilience
Net metering lets businesses and individuals become self-sufficient and less reliant upon traditional power grids. With the power to generate their electricity, the solar system owners get valid control over their energy supply and rightly face any kind of power outages and utility bill-related fluctuations.
This kind of increased energy resilience certainly enhances the stability and security part of the energy system.
- Renewable Energy Production
Net metering done post solar panel installation encourages the adoption of energy renewable sources, especially solar power among the general public. With such widespread knowledge, businesses, and individuals will rely on rooftop solar systems and net metering to improve overall clean energy production.
This does promote sustainability, and reduce a valid part of green gas emissions, addressing the climatic change in one place.
Considerations to Address Before Solar Panel Installation
Though net metering has its set of benefits, as a solar system owner, it’s quite essential to understand the possible challenges that happen toward net metering policies from time to time. Some of the common considerations include:
- The overall system size of a solar panel for a home or business must be optimized to match the respective energy needs to yield the maximum benefits of net metering.
- Staying informed regarding the chosen net metering regulations along with policies for different states plays a crucial role in impacting your financial benefits.
- Solar energy generation can vary at times, and pre-planning the possible fluctuations in electricity production should be given priority.
Conclusion
Net metering is undoubtedly a game-changer for every solar panel owner, as it offers accountable environmental benefits, financial savings, and greater energy independence. With favorable easy-to-understand and adaptable government policies in place, you are all set to invest in the solar system.
Reach out to EL SOL, best solar company in Kerala, now to find out valid rooftop solar panel installation solutions along with potential ways to reduce your utility bills as well.
