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All About Net Metering And How It Works


If you’re like most homeowners, you’re probably curious about how net metering works. Net metering is a process that allows homeowners with solar panels to sell excess energy back to the grid. This can be a great way to save money on your utility bills and help the environment at the same time.

In this post, we’ll explain how net metering works and answer some common questions about it. Keep reading to learn more!

What Is Net Metering And How Does It Work

Net metering is an innovative concept that allows electricity producers, such as homeowners harnessing the power of their rooftop solar panels, to feed extra energy back into the grid and receive credit for it.

For homeowners, net metering can provide cost savings on electricity bills by offsetting usage from electric utility companies. Under a typical net metering system, utility company customers can connect with the electric grid and allow their meters to spin in both directions – so when household energy production exceeds household energy consumption, credits are automatically applied to a customer’s future electric bill.

Additionally, some jurisdictions offer additional financial incentives such as renewable energy credit trading programs or grant-based funding opportunities. Net metering is presenting a revolutionary new way for utilities and households alike to reduce costs on electricity while also contributing to global renewable energy goals.

Net Metering vs Buyback Program

Understanding the differences between net metering and buyback programs with solar panels is key to making decisions about how to offset energy costs.

Net metering allows a home or business to feed power back into the power grid, and receive credits for it on their next energy bill. Buyback programs involve selling excess electricity directly to grid-connected utilities, who will then credit the amount sold onto their customer’s bills.

The advantage of net metering is that customers can see the direct benefit of reducing their energy bills, while buyback programs provide a more consistent long-term return.

Ultimately, which is the better option depends on unique and personal circumstances; however, both have been proven to be effective in aiding renewable energy production while helping consumers save money in the process.

Benefits of Net Metering

Net metering is an energy policy mechanism that provides a variety of benefits for households and businesses.

Net metering allows customers to safeguard against rising utility costs by producing some or all of their power, whether through solar panels, wind turbines, or other renewable sources. This electricity is fed into the distribution grid through net metering systems, enabling customers to reduce their monthly bills and increase their independence from the traditional grid.

With the implementation of net metering, both customers and utilities can experience increased cost reductions from reducing investment in new infrastructure and eliminating line losses.

Additionally, its use helps reduce air pollution from power stations as people turn away from conventional energy resources towards renewable sources such as solar and wind making it immensely beneficial to our environment. All in all, net metering is a win-win for everyone involved!

Disadvantages of Net Metering

While beneficial, net metering also has its drawbacks, the most significant being that utilities must raise rates for all their customers to cover the costs associated with it. This may add an extra burden on those who have not adopted net metering due to either lack of access or resources.

Furthermore, requiring utilities to buy back solar power at retail rates can discourage investment in other renewable energy sources and force dependence on net-metered solar panels. It can be difficult for consumers to make informed decisions when considering whether or not to install net-metered solar panels if they are required to pay additional fees, policy changes, and other infrastructure investments incurred by the utility company.

Finally, there is also the risk of over generation and power export capacity limits of many grid networks, which could lead to irregular or insufficient measures of residential solar generation if left unchecked.

Electricity Bills And Net Metering

The concept of net metering provides a unique opportunity for households and businesses with solar installations, allowing them to reduce their electricity bills greatly. Net metering works by having a monitoring system to measure the flow of energy between the home or business and the utility grid.

When your power draws from the grid, you are charged per kilowatt-hour; however, when excess electricity is sent back onto the grid, it is credited to your electricity bill at the same retail rate. This creates an incentive for solar owners to conserve energy, helping to lower their overall bills and save money.

With net metering, families and businesses no longer have to worry about paying high prices for nonrenewable energy sources. Instead, they can simply check their bills each month to see just how much they’re able to save!


As the most common and effective solar policy in the United States, net metering allows homeowners to store the energy they produce with solar panels and offset their need for electricity from the grid. This can save you tens of thousands of dollars over the lifetime of your solar panel system. If you’re interested in going solar, be sure to check if your state has a net metering policy in place.

Is a solar power system right for your needs?

Maine Solar Engineering can help you understand your options.

Maine Solar Engineering

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