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Net Metering For Solar Panels (A Helpful Illustrated Guide) | DroneQuote

By DroneQuote | Posted June 20, 2019

Net metering in the simplest terms

Net metering in the simplest terms

Net Metering For Solar Panels

Reading time: 4 minutes

How solar panels work

In order to understand net energy metering, AKA net metering, first you have to understand how solar panels work. Obviously, they require sun, hence the name solar panels, but when electricity is produced it has to go somewhere. Either it goes into your plugged in things like the refrigerator, your pool pump, your AC, or whatever else is on during the day. If electricity doesn’t go into devices, then it may go into a battery storage system like the LG Chem batteries now available, or back to the electric grid. One way or another, the electricity has to go somewhere.

If the electricity doesn’t go somewhere in your home, it goes back to the electric grid; enter net metering.

How net metering works

Net metering works by giving you a monetary credit for each unit of electricity that your system produces but isn’t used or stored in your home. The more electricity you produce but don’t use, the greater the balance becomes in your favor. During a three month stretch in 2018 from July to September, you can see below how the home used more electricity than the system was generating, which was offset by the surplus electricity generated by the solar panels during the rest of the year.

Net metering for annual generation

Net metering for annual generation

Below is a window that shows a much shorter frame of time, 13 days to be specific, wherein the home was using more electricity than the system generated. These surplus credits star to accumulate into a positive balance in your account.

Net metering solar generation month to date

Net metering solar generation month to date

In the previous two graphs, you see the annual and monthly electricity use or electricity surplus. In the graph below you can see the bell curve of electricity generation. As the sun comes up the home’s electric usage becomes an electricity surplus from the solar panels on the roof. As the sun moves into the optimal position you can see the electricity generation peak at about 12:30-1:00. All that surplus electricity was sent back to the electrical grid and that user’s utility account was credited with monies in their account.  If you compare the graph below for 6/15/2019 to the the graph above, you can see how 15th generated a significant surplus of power.

Net metering daily solar generation

Net metering daily solar generation

In the graph below, for 6/09/2019, you can see how the electricity generation bell curve was interrupted at about 2:00. What happened there is that the AC units powered on as the day got hotter. If you compare this graph to the monthly graph above see how on 6/09/2019 there was an overall electricity deficit. Instead of billing the customer’s account, the utility company debits its previous solar generation credits.

Net metering solar generation applied to heavy usage

Net metering solar generation applied to heavy usage

How am I charged for electricity with net metering?

San Diego Gas & Electric, Southern California Edison, & Pacific Gas & Electric have their own unique nuances for net metering. Given that solar generation and electricity usage are dependent on the time of year plus current weather, it would be too difficult and impractical to reconcile the utility bill on a monthly basis as is the case before you install solar panels. As such, utilities will bill you once a year. Case in point, below you can see the current monetary balance of $405.12 for the account tied to the graphs you see above. The date on which the system is turned on is also the close-out for balancing out the electricity your system generated for the entire year minus the electricity you consumed. This date is known as the “true-up” date.

This system & utility account belong to me, and my true-up date is December 11th. From now until that date I know my family will run the AC, the kids will continue leaving lights on, and my wife will task me with putting up Christmas lights up in late November. As a result, we will use the $405.12 below and almost break even. Last year we paid the utility company ~$50 for the entire year.

Net metering current solar balance

How much does net metering pay?

Net metering is a BIG part of how solar works on a financial level and is the primary reason why solar is so prevalent in many states, especially California. In ideal situations, the utility will give you a one-to-one rate for the surplus electricity generated by the system. For example, if the utility charges you .29¢ then you’d get paid the same amount for that unit of electricity. If at the time of true-up, your system generated a surplus of power for the year, then you would, in fact, get a lower rate closer to ~.025¢. So it would not make sense to significantly oversize your system compared to your usage unless you plan on increasing your power use a lot more after you install solar panels.

Some utilities will pay somewhere in the range of ~.025¢ for annual surplus (at the time of true-up). Some utilities always pay pennies on the dollar, and some pay zero. You can be sure those utilities have very few, if any customers that have solar installed, because without net metering solar only makes sense, with net metering it can make dollars.

What does net metering mean to me?

Net metering can mean relief from the high cost of electricity, and the best part is that the cost of solar is less than the cost of electricity. Furthermore, DroneQuote offers you a great solution to homeowners that want to explore solar but don’t want to sit through multiple sales presentations. If you have been considering solar for your home, head on over to DroneQuote and request quotes. Our solar experts will design system options that fit what you’re looking for, walk you through the different installer quotes on a live webinar (screen share), and answer all your questions. All from the comfort of your own home and without having to sit through multiple in-person presentations. Get started today so you can install in 2019 before the summer rush and before the tax credit decreases.

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