Net metering is often times a confusing topic for many. But, it does not have to be. Many people try to make it more complicated than it really is. Here I want to define what net metering is. I also want to talk a little bit about how it pertains to renewable energy. Finally I want to help you decide if net metering is right for you.
What is Net Metering?
Net metering is used when some form of generation is used on the same service where power is being consumed. Confusing right? As always, I want to use an example. First, let’s talk about the term “net”. To net something out means to subtract what is used from the whole amount. For example, if you had $100 worth of sales but you had $45 worth of expenses then you netted $55. The same thing works with net metering. If you are generating power, be it from a generator, solar panels or wind turbines etc., and you are putting that power back onto the grid we need a way to calculate what you consumed versus what you produced.
Net metering typically uses one meter. Using a traditional electro-mechanical meter you can actually watch the disc turn backwards when you are producing more than you are consuming. This is an analog way of doing the math for you. When you are consuming more than you are producing the meter turns the correct way. When you are producing more than you are consuming the meter turns backwards.
Net Metering and Renewable Energy
I could not talk about net metering and not mention the role it plays in renewable energy metering. Most likely the first thing that popped into you head when you read the words “net metering” was solar power. So, is solar power metered with net metering? The answer is yes. This was the most common way to meter solar power. It is easier to do from a billing stand point and can be less work all together. With other types of renewable energy metering separate billing accounts need to be set up for credits and it can be very confusing. Using one meter however, allows you to read the same meter just like you did every month. As far as billing goes it looks like the customer is using less every month.
However, not all utilities offer net metering tariffs. That is unfortunate because from a customer’s view it is really the best of options for feed in tariffs. This is because you are trading retail Kwh for retail Kwh. What I mean is that if the rate that you pay for electricity is $0.10 per Kwh every Kwh that you avoid because of your solar panels or wind turbine reduces your power bill by $0.10 per each Kwh you produce.
Is Net Metering Right for Me?
It depends. If it is an option that is available to you from your utility then it is most likely the best option. There are many things to consider with the different rates that may be available but generally speaking, net metering is usually the best option.
Are you planning on trying to produce more than you consume? Many utilities protect themselves against this by making sure that they limit the size of your renewable energy service. They pay wholesale rates for electricity so why would they want to pay you retail for what you produce?
In conclusion, I hope this dispels the net metering confusion that is floating around out there. Normally one meter is used in this arrangement. This type of metering provides a simple and easy way for utilities and customers to enjoy the benefits of renewable energy systems. Also, if it is available where you are it is most likely the best option for you.