Net Metering or Net Billing:

Net metering is an electricity billing mechanism that allows consumers who generate some or all of their own electricity to use that electricity anytime, instead of when it is generated. This is particularly important with renewable energy sources like wind and solar,

If during a sunny day more electricity is produced by your solar PV system than you use or consume, this excess solar power is delivered back to the utility grid with the effect of rotating your electric meter backward. When this happens you will normally be given credits by the local power company (DISCOM) for the amount of electricity produced by your grid-connected PV system.

If during the billing period, you use or consume more electrical energy than you generate, you are billed for the “net amount” of electricity consumed as you would be normally. If, however, you generate more solar energy than you consume, you are credited for the “net amount” of electricity generated which may be either a reduction in your monthly electricity bill or a positive repayment directly to you or the account holder.

How to Net Metering work

When installing a PV system, if net metering is available by your local electricity company, you may be required to install a new second electrical meter instead of using a single electricity meter that spins in both directions. This new meter allows for a measurement of net energy consumption, both entering and leaving the system and would be used to reduce your electricity bill. However, each electrical utility company has its own policy regarding the buying back of energy generated by your own small solar power station.

While net metering is the ideal way to resell your solar-generated excess power, some companies buy back energy at a lower wholesale rate than the electricity you consume from the same power company. This means that you may need to generate more solar power than you would normally consume just to break even.


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