Net Metering
Net metering is an electricity policy that requires utility companies to deduct renewable-energy outflows from utility-energy inflows prior to billing, so that customers are billed only for energy usage that exceeds the production of their solar-electric systems. The tracking of inflows and outflows occurs at the meter.
At any time of the day, a solar-electric system may produce more or less electricity than its off-takers need. If the system is producing more than its off-takers need, the excess electricity will automatically go through the electric meter into the utility grid to be supplied to other customers. When this occurs the meter runs backwards. If the solar-electric system is producing less electricity than the off-takers need, the system will automatically draws the shortage electricity from the grid into the system to be supplied to its off-takers, and meter will run forward.
Example:
| 100,000kWh | Electricity purchased from utility before the PV system, then PV system installed |
| -50,000kWh | PV electricity produced, and credited to your account |
| =50,000kWh | “Net” amount you buy from utility after PV system installed |