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Net Metering Explained: How You Can Save Money and Generate Revenue with Solar Energy

Updated: Feb 5


Generate Revenue with Solar Energy

Solar energy is a clean, renewable energy source that is rapidly gaining popularity worldwide. As more and more people turn to solar power, it's essential to understand how net metering can help them save money and generate revenue with solar energy. Net metering or Net Energy Metering (NEM) is a billing arrangement that allows solar panel owners to offset their energy costs by selling excess energy back to the grid. It's an effective way to maximize the benefits of solar energy and reduce reliance on nonrenewable sources of energy.


In this article, we'll explain how net metering works, the eligibility requirements, and the advantages of using it. Whether you're a homeowner, a business owner, or a nonprofit organization, net metering can help you save money, reduce your carbon footprint, and contribute to a more sustainable future.


How Net Metering Works

Net metering is a program that allows you to receive credits for the excess solar electricity your solar panels generate and return to the grid. This credit offsets the electricity you draw from the utility, which means you can benefit from the full economic value of the solar energy your solar panels produce. With the right sizing of your solar system, you have the potential to eliminate your monthly electric costs entirely.


Typically, solar panels generate the most electricity during the middle of the day when the sun is shining. Unfortunately, this is also when your household uses the least amount of electricity. As a result, your panels generate more electricity than your home needs at that time. When this happens, the excess electricity is sent back to the grid. Net metering then comes into play, where a net metered system sends solar energy to the grid, causing your electric meter to spin backward, and your utility applies a credit for the full retail value of electricity to your account.


At night, when your solar panels are not generating electricity, you draw electricity from the grid, and your electric meter spins forward again. The utility nets the amount of electricity you sent to the grid versus how much you used to calculate your final bill at the end of the billing period. As a result, the term "net metering" was coined.


Energy credits can be carried over from month to month in most full-retail net metering schemes, though not all of them do. Hence, if you produce more power than you consume in a given month, you may use the extra net metering credits to reduce the amount of electricity you draw from the grid the next month. Often, during the summer, when the days are long and sunny, you'll have more credits. These summer credits can be saved up to lower your electricity costs during the gloomy winter months.


Net Metering Eligibility Requirements

If you're considering net metering, it's essential to know the eligibility requirements. In most cases, net metering is available to both residential and commercial customers. However, specific requirements may vary by state, utility company, and solar installation size.


To be eligible for net metering, you'll need to have a solar energy system installed and connected to the grid. Your system must also meet specific technical standards, including safety and performance requirements. Your solar panels must be rated by the National Renewable Energy Laboratory (NREL), and your inverter must meet Underwriters Laboratories (UL) safety standards.


Additionally, your utility company may have additional requirements for net metering eligibility. For example, some utility companies require customers to have a minimum credit score or to own their property. It's also worth noting that some states have limits on the size of solar installations that can participate in net metering.


Overall, the eligibility requirements for net metering vary depending on your location, utility company, and solar installation size. It's essential to do your research and contact your utility company to understand the specific requirements in your area. By meeting these requirements, you can take advantage of the benefits of net metering and save money on your energy bills.


Net metering is a legal requirement in 38 states including Washington D.C. Approximately 28 states necessitate full-retail net metering while 18 offer alternative net metering plans or programs. Even in states where net metering is not required, some utility companies, such as those in Texas and Idaho, provide net metering options to their residential solar customers.


Saving Money with Net Metering


Saving Money with Solar Energy

Net metering not only allows you to generate revenue with solar energy, but also provides an opportunity for substantial cost savings on your electricity bills. By producing your own energy with solar panels and sending excess energy back to the grid, you are credited for the excess energy you produce. This means that you can use those credits to offset the cost of the electricity you consume when you're not producing energy.


In many cases, the credits you earn from net metering can fully offset your electricity bills, leaving you with little to no utility charges. Plus, the savings can accumulate over time, especially if you install a larger solar panel system that generates more energy than you consume.


Net metering is a win-win situation that benefits homeowners and the environment. By choosing to install solar panels and taking advantage of net metering, you can save money while also reducing your carbon footprint and contributing to a sustainable future. So, if you're looking to cut down on electricity costs, net metering is definitely worth considering.


Generating Revenue with Solar Energy

With net metering, you don't only save money on your electricity bills but also have the potential to generate revenue. When your solar panels generate more electricity than your home needs, the excess power is sent back to the grid. This excess power can be credited to your account and used to offset future electricity bills. In some states, utilities are required to pay you for the excess energy you produce, known as net metering credits. The credits can be sold back to the utility company or transferred to another account holder.


This can be an excellent opportunity for homeowners to invest in solar panels and generate revenue while helping the environment. It's essential to check the net metering policies in your state and understand how much you can earn from net metering credits or better still check in with a reputable solar expert like IntergrateSun. With the right equipment and monitoring, homeowners can maximize the benefits of net metering and create a sustainable source of income.


Net Metering and the Future of Solar Energy

As the demand for clean energy continues to rise, net metering is set to play an even more crucial role in the future of solar energy. As more states and countries adopt net metering policies, homeowners and businesses can take advantage of this opportunity to reduce energy costs and generate revenue. With the increasing popularity of electric cars and smart homes, the need for clean energy will continue to grow, making net metering a valuable investment.


But to be truthful, the golden era of net metering is in the past and the future of net metering is uncertain. Net metering, despite being the main catalyst for the solar industry, is now under threat from power utility companies that prioritize profits.


To ensure that you maximize your savings through net metering, it's wise to make the switch to solar power as soon as possible. Waiting might lead to the utility companies discontinuing the program, which could ultimately reduce your savings in the long term.


As a leading solar energy company, IntegrateSun is committed to helping our customers take advantage of these opportunities and benefit from the future of solar energy. Contact us today to get an instant solar estimate and also learn more about how we can help you start saving money and generating revenue with net metering.




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