What is net metering?

Solar panels are an increasingly popular renewable energy source for homes and businesses. However, solar panels generate their energy during the day, usually between the hours of 7 a.m. and 5 p.m., depending on the time of year.

Since homes aren’t using as much energy during the day as they do at night, much of the energy being generated is being wasted or sent to the power grid without compensation. If you don’t have a battery storage solution to capture this extra energy, there’s another way to ensure that this energy isn’t being wasted.

In this article, we’ll explain what net metering is and how it works.


What is net metering and how does it work?


Net metering is an agreement between residential homeowners and utility companies that allows for customer power generation to be fed into the local power grid so that it doesn’t go to waste without compensation.

In most states, utilities compensate you for this surplus energy through credits on your energy bill. You can then use these to supplement and offset the cost of future bills when your panels aren’t producing as much energy. 

For example, you can receive credit for generating excess electricity during the spring and summer months when the days are longer, and use the credits toward your energy bill in the winter months when the daylight hours are shorter. 

As your solar panels produce electricity, your power meter runs in reverse as it sends excess power to the grid. This enables you to earn credits for future power bills. 

According to SEIA, “on average, only 20-40% of a solar energy system’s output ever goes into the grid, and this exported solar electricity serves nearby customers’ loads.”

It is worth noting that net metering policies generally only compensate homeowners if the energy is produced from a renewable source, such as solar or wind energy.  

According to SEIA, 38 states, Washington, D.C., and four U.S. territories have mandatory net metering rules. Is Utah one of them?


Does Utah offer net metering?


Utah had mandatory net metering rules prior to November 2017. According to the state, if you submitted an interconnection application to Rocky Mountain Power before November 15, 2017, then you are a net metered customer.

Although Utah no longer has an official net metering policy, there is a new state net billing program with Rocky Mountain Power that works similar to net metering.

Any applications submitted after October 30, 2020 will receive the compensation rates as ordered by the Public Service Commission in the Export Credit Docket. 

According to Rocky Mountain Power’s Schedule 137, the rate of exported customer-generated energy credits as of May 1, 2021 is 5.817 cents per kWh from June through September and 5.487 cents per kWh exported from October through May.

So, essentially Utah offers net metering under its own state system with Rocky Mountain Power. If you have a utility company other than Rocky Mountain Power, you’ll want to check with your utility company directly to see if they offer net metering for solar panels. 


How is this different from battery storage?


Net metering is different from battery storage in that your excess energy produced goes to the power grid. This allows you to earn a credit on future power bills. It can help to alleviate stress on the power grid by supplementing the commercial power systems.

Battery storage allows you to store your excess energy within your home or business for your own use. This enables you to become completely independent of the power grid and truly generate your own energy. 

Each of these solutions has its pros and cons. The solution that’s right for you ultimately depends on how much energy your solar panels produce, your budget, and what you want your solar system to accomplish. 

With ES Solar, both net metering connections and battery storage solutions are available for your solar panel systems. 


In conclusion


Net metering is a great way to ensure that your renewable energy doesn’t go to waste. With net metering programs, you can ensure that you are benefiting from your solar by taking advantage of getting credit for your excess electricity generation. 

Are you ready to make the switch to solar energy? Utah has some of the largest solar potential in the country!

ES Solar is the industry leader in Utah residential and commercial solar panel installation. Based in Layton, we have a crew of certified contractors who are ready to tackle your solar project. 

With ES Solar, you’ll receive a free home evaluation and customized solar panel based on your energy needs. This will help you to determine if solar is the right choice for you.

Contact us today to talk with one of our solar panel experts and book your service with Utah’s top solar panel company! Call us at 801-614-0606.

Article written by Chase Charaba.