System Types

Net Metering

Net metering is a utility billing arrangement that allows grid-tied solar customers to export excess electricity to the grid and receive credits that offset their future consumption. When your solar panels produce more power than you use, the surplus flows to the grid and your meter effectively spins backward, banking energy credits for later use.

Under traditional 1:1 net metering, each kilowatt-hour exported earns a credit equal to the full retail rate you pay for grid electricity. If you export 500 kWh of excess solar during sunny summer months and then consume 500 kWh from the grid during cloudy winter months, the credits cancel out and your net energy cost is zero for that portion of consumption.

Net metering is the single most important policy factor in solar economics. With 1:1 net metering, the grid acts as a free battery with 100% round-trip efficiency — vastly more cost-effective than physical battery storage. Systems designed for net metering can be sized to offset 100% of annual electricity consumption, zeroing out the energy portion of the utility bill.

However, net metering policies are evolving. Several states and utilities have moved to net billing or successor tariffs that credit exports at wholesale or avoided-cost rates rather than full retail — significantly reducing the financial benefit of grid export. California's NEM 3.0 transition is the most prominent example, reducing export credit values by 75% or more during midday hours.

Where net metering credits are being reduced, battery storage becomes more attractive because storing excess solar for personal consumption later in the day avoids exporting at low credit values. This policy shift is a major driver of the hybrid system trend, as homeowners optimize for self-consumption rather than grid export.

Frequently Asked Questions

Does every state have net metering?

Policies vary significantly by state and utility. Most states have some form of net metering or successor program, but the credit rates and terms differ widely. Some states offer full retail credit, others offer reduced rates, and some are phasing out net metering for new installations. Check your state's current policy through the DSIRE database or your utility's website.

Can I still benefit from solar if net metering is reduced?

Yes. Even without favorable net metering, solar panels reduce your bill by powering your home directly during production hours (self-consumption). Adding battery storage lets you use solar power in the evening instead of exporting it at low credit rates. The economics shift from grid export toward self-consumption optimization.