Net energy metering, typically called “net metering,” is a billing practice from a utility that credits a consumer for electricity that the customer produces onsite but does not need at the time that energy is produced. Many people who install solar panels on their home or business generate more power than they use at some points, and net metering allows them to sell that energy back to the grid.
The difference between parallel generation and net metering is that with net metering a customer is usually compensated at full-retail value for their excess electricity, where with parallel generation they are not.
What is net metering in solar energy?
Net metering in solar energy describes what happens when you make more energy with solar panels than you need. When sunlight hits a solar panel it produces electricity. That energy is first used for any electricity needs in the building it’s connected to, and any extra power needed is supplied by the grid. When more solar energy is being made onsite than is needed by the building any extra is sent back to the grid. If your utility uses net metering, you are given full retail credit for the extra power you produce.
For solar customers net metering works great as solar energy is only produced during daylight hours, but power needs exist at night too. With net metering in solar energy projects we can design a project to produce enough energy during the day to both power the building and sell enough energy to the grid to credit the project owner for any electricity used at night. With solar energy projects, the only downside of net metering is that the utility may limit the maximum size a solar project can be.
Net metering for solar in Kansas and Missouri
With over 100 utilities in Missouri and Kansas there are a lot of different net metering policies. These range from no net metering at all to utilities allowing net metering on projects of over 100 kW for homes. For Evergy, the largest utility in Kansas, the maximum size of a net-metered solar project is about 18 kW for homes and about 120 kW for businesses. In Missouri the maximum size of a net-metered solar project is typically 100 kW for homes or businesses.
It’s also worth remembering that even if your utility does not have net metering you can still go solar using parallel generation.
How does net metering work?
Utilities offering net metering for solar install special electric meters during a solar installation. These meters allow a utility to record both how much power a building uses and how much extra power a building puts back onto the grid. This meter is called a bi-directional meter.
In Kansas and Missouri most of our utilities allow you to use the extra energy credits any time during the monthly billing cycle. After that time any additional credits are converted into a bill credit at a low rate, usually about 25% of retail value. For this reason it is important to take the net metering policies into account when designing solar panels for a home or business.
Is net metering worth it?
Net metering is a way to encourage solar energy production, with all of its economic and environmental benefits. Even better, net metering encourages solar at individual electric meters, which is where power is needed most.
Rooftop solar is sometimes called “distributed generation” as solar panels will add power to the grid from solar arrays distributed throughout the grid and not a single point like a power plant or even a huge utility-scale solar project. When extra solar energy is sent back onto the grid it flows to the nearest energy need, usually the nearest neighbor. Having power coming into the grid from lots of points makes the grid more robust and less likely to fail.
In this way solar net metering is a benefit for not just the consumer, but also for the entire community as they will have a stronger electric grid less likely see brown- and blackouts. Many studies quantified the economic costs and benefits of net metering. When the studies are done independent of the utility companies those studies show definitively that solar net metering is worth it.
From a consumer perspective, net metering is worth it as long as you are not too restricted in the size of the solar project by utility policies. For a homeowner, a battery backup system provides the same advantages as net metering, so if you have batteries on a solar project net metering is unnecessary.
For homeowners with solar panels who face less restrictive net metering policies, the practice provides some of the benefits of having a battery system without the expense of buying one (but if you want continuous power you’ll still want a battery backup system).