Net Metering        

Definition

Net metering is a state level electricity policy for consumers who own "qualifying facilities," which are generally smaller, renewable or alternative energy sources such as a wind or solar electric energy.  "Net" is used in the sense of meaning "what remains after deductions" --  the deduction of any energy outflows from metered energy inflows.  Under net metering, an electric system owner receives retail credit for at least a portion of the electricity they generate.  The concept envisions ones existing electricity meter spinning backwards, effectively banking excess electricity production for future credit.

Net Metering Programs

Utility Company net metering programs serve as an important incentive for consumer investment in alternative and renewable electric energy generation.  Net metering enables utility customers to use their own electricity generation to offset their consumption over a billing period by allowing their electric meters to turn backwards when they generate electricity in excess of their usage.  This offset means that utility customers receive retail prices for the excess electricity they generate.

Without net metering, a second meter is usually installed to measure the electricity that flows back to the provider, with the utility company purchasing the power at a rate much lower than the retail rate.

Net metering is a low-cost, easily administered method of encouraging consumer investment in alternative and renewable energy technologies.  It increases the value of the electricity produced by renewable generation and allows customers to "bank" their energy and use it a different time than it is produced giving consumers more flexibility and allowing them to maximize the value of their production.  Utility Companies may also benefit from net metering because when consumers are producing electricity during peak periods, the system load factor is improved.

State programs vary widely, for more information on your state program, go to the state-by-state net metering table.  The table allows users to compare state policies and voluntary utility programs based on several key components:  maximum individual system capacity, maximum aggregate net-metered capacity, eligible customer classes, eligible technologies, treatment of net excess generation (NEG), interconnection standards, and the types of utilities affected.

 

The following map depicts the states where net metering is available.

 

Source:  US Department of Energy
              Energy Efficiency and Renewable Energy.