How to Save on Solar With Net Metering

Reader Contribution by Sarah Kezer and 123solarpower
article image

Since 2009, solar prices have gone down 62 percent, with every part of the supply chain trimming costs, according to Bloomberg news. Advancements in technology also play a large part in cost reduction by improving efficiency and energy output, which in turn lowers a system’s cost per kWh. The evolving solar power landscape continues to make it easier and cheaper for all types of households to adopt solar. There are several more ways that you can save on the cost of going solar, one of which has to do with policies determined on a state level, namely net-metering. Let’s look closer into exactly what net metering is and how it can save you hundreds of more dollars each year paired with your solar panel system.

Net Metering Basics

Net metering refers to the billing procedure that allows residential customers who produce their own electricity from solar power to feed excess electricity back into the utility grid. The owner of the system for that electricity then receives credit at the same retail price that paid for electricity taken from the grid. What this means, is that if you have a residential solar system that is net-metered, your electricity meter can run actually backwards to provide your credit against what electricity you use from the grid, since you’re only billed for the net energy you use. You basically get paid for any excess energy that you produce but don’t use. This can add up to a lot of savings in the long run and offset the initial investment cost of your solar panel system.

Net metering policies are decided on and regulated by each state differently. A majority of states in the U.S have authorized net metering, but even then, they all have different approaches to policies with variations in multiple criteria. The differences between state regulation mean that the cost benefits of net metering can vary. If you live in a state without net metering, you can still receive credit for excess electricity, just at a different rate. In these cases, the utility company will likely pay you back at the wholesale rate, which is usually lower.

Best States For Net Metering

States with vast solar adoption and net metering programs allow solar system owners to get the most money out of their investment. Some states that are leading the way in solar-friendliness include Massachusetts, Rhode Island, and California.

Residential solar customers in California that feed excess solar power back into the grid, get one bill credit for each one kWh of utility-generated power they give. These customers are able to receive a huge amount of electricity bill savings by installing a solar system and taking advantage of net metering. How much exactly? According to GTM Research $700 to $1,000 of savings on their annual electricity bill compared to a scenario with no net energy metering at all, equivalent to savings of an additional 54 percent to 85 percent. 

 Massachusetts is another state that gets an “A” on its net metering report card. In 2016, the state’s governor lifted the reimbursement cap utilities had to pay to solar energy producers. Its new policy will allow for continued solar development, but at a reduced cost to ratepayers, according to MassLive. This new policy was a compromise between government and business and now reimburses solar owners 11 or 12 cents per kilowatt-hour. Although lower than the retail rate, this reimbursement adds up big in the long run and longevity of a residential solar power system.

 Adopting solar power is a powerful investment for your home and environment. If you want to see exactly how much you can save by going solar, you can use our solar calculator. You can also see the exact net metering policies and other solar rebates and incentives online at DSIRE, the Database for State Incentives for Renewables and Efficiency.

Image credit: Pilar Blasco

Sarah Kezer is passionate about helping others take advantage of the power of solar energy. At 123SolarPower, Sarah assists in answering questions and providing expert information for users to explore their options when it comes to going solar. 123SolarPower connects individuals with the largest network of solar power providers in the U.S. Connect with Sarah on Twitter and Facebook. Read all of Sarah’s MOTHER EARTH NEWS posts here.

All MOTHER EARTH NEWS community bloggers have agreed to follow our Blogging Guidelines, and they are responsible for the accuracy of their posts. To learn more about the author of this post, click on their byline link at the top of the page.

Need Help? Call 1-800-234-3368