You will earn credit for the solar electricity you generate through a policy called net metering. Net metering allows you to offset your utility electricity consumption with the solar electricity your array produces. When your system generates electricity, that electricity flows into your home or building and is consumed on-site. When your solar panels produce more electricity than your home or building needs, the excess electricity is sent out to the local grid, where it is consumed by your neighbors. Through net metering, you receive full credit for the excess electricity you feed onto the grid. Once you install solar, your monthly electric bill will be calculated to reflect: the total amount of electricity you consumed minus the total amount of electricity you produced (i.e., the solar electricity you fed onto the grid).
It is common for solar arrays to produce surplus electricity during certain times of the day, months, or seasons. Consider, for example, a sunny summer day. Your panels will produce a high volume of solar electricity during the day, but you are likely away from home and not consuming any of that electricity. In that case, the solar surplus will flow back out to the grid. Net metering enables you to receive credit for these seasonal or daily surpluses. Your utility will then apply those credits to your monthly bill, covering the electricity you purchase at night or during periods of low solar production. Should you have excess credit at the end of a billing cycle, you’ll be able to roll it over to the next month.
By allowing you to offset your utility electricity consumption with your solar electricity production, net metering helps you reap the full financial value of your solar array. Most states have passed laws enabling net metering. If you live in a state with net metering legislation, you are guaranteed the right to net metering, regardless of where you live or who your utility company is. Learn more about state-specific net metering laws.
