How does Net-Metering work?

“Net Metering” is an industry term used to describe how a utility company compensates you for any overproduction from your solar array which is sent back to the utility. Net metering simply means the utility gives the customer full retail credit for all energy the solar array produces but is not consumed by the owner and sent to the utility for them to sell to other customers.

If a utility does not “net meter” it generally means they do not give you full retail credit for any overproduction, but rather a lower “avoided cost” payment. Understanding your utilities policy is essential to anyone considering a solar project since it has a dramatic affect on the economics of the project.