You may be wondering why these two terms are so significant. You’ll often hear these words when installing a solar energy system for your home or business. Therefore, understanding their meaning and impact is essential.
While solar energy net billing and net metering may look similar, they differ. Both approaches yield credits on your utility account from excess electricity a photovoltaic system generates. However, there are discrepancies in pricing and time frames for obtaining or using these credits. If you want to offset purchasing power from your electric provider, investigating both methods closely to decide which works best for you pays off.
Net Billing
Net billing is a solar energy system that enables you to feed any excess solar power generated back into the grid. As a result of this, for every kWh sent back in return, you will receive an energy credit. In other words, treating your solar-generated electricity is similar to how large plants or producers sell their energy supply to the grid. Instead of receiving a credit on your utility bill due to lower consumption rates, etc., you will receive actual dollar value. Depending on the current rate of electricity supply.
Suppose your solar panel roof generates more electricity daily than you need. The excess electricity flows back into the grid with net billing and credits your account.
You can draw electricity from the grid when your solar panels don’t produce enough. The difference is that you’ll only pay for the net amount of electricity for the solar energy you use over the month, which considers the excess electricity you generate during the day.
In the example above, if you generated 500 kilowatt-hours during the day and consumed 300 at night, you’d use 200 kilowatt-hours monthly. If your utility company charges $0.10 per kWh, installing a solar panel system would cost $20 ($0.10 x 200 kWh) instead of $80 ($0.10 x 800 kWh).
Net Metering
As an alternative, net metering is a solar energy system that allows homeowners and businesses to balance their energy usage from utility providers with solar power generated on-site. This billing mechanism helps customers who generate electricity by utilizing solar panels track the amount of energy they consume or send back to the grid – via bidirectional meters. Any unused power produced by these arrays can be sent back as “net” energy into the grid. In exchange for their energy surplus, the utility provides customers with credits compensated at a total retail value per kilowatt-hour. These credits can then be applied to one’s account and stored against future consumption.
For example, suppose your house has solar panels on its roof. During the day, when the sun shines, your solar panels generate electricity. If you’re not using all that electricity, the power goes back into the grid.
Net metering allows your utility company to credit you for that excess electricity. They will measure how much electricity you send back to the grid and deduct that from your overall energy usage. It means that if you generate more electricity than you use, your electric bill will be harmful.
For instance, you generate 10 kilowatt-hours (kWh) of electricity on a sunny day and use only 8 kWh. The extra 2 kWh returns to the grid, and your utility company credits you. If your utility charges 10 cents per kWh and credits you for the additional 2 kWh, that’s a 20-cent credit on your bill.
Then, at night or on a cloudy day when your solar panels aren’t generating as much electricity, you’ll draw electricity from the grid as usual. Your overall energy usage will differ between what you generated and consumed from the grid.
As a Solar Energy Enthusiast, What Would I Choose?
Ultimately, solar energy net metering and billing benefit anyone interested in taking advantage of the renewable energy their solar panel installation produces. Net metering is generally more suitable for those who use more electricity during the day than at night. These are businesses or large homes. In contrast, solar billing works best for smaller systems with low energy usage.
Whichever option you choose, solar net metering and net billing help incentivize renewable energy production and reduce the current rate of supplied electricity from traditional power plants. They are also easy to access and can quickly lower energy costs. If you’re considering taking advantage of solar energy for your home, look into solar net metering and net billing as an efficient way to save energy and money.
Investing in a solar installation is an achievable and worthwhile endeavor for your future, regardless of the incentives that may or may not be available. Having experts like Solaria Energy Solutions at your side will make it easier to decide whether installing a system is right for you and what circumstance you find yourself in.
