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What is Net Metering?

Updated: Dec 1, 2021

Not only can you reduce your electric bill with a solar energy system, you may even be able to ‘sell’ electricity back to the utility company with net metering. Net metering is a system of billing that allows owners of solar energy systems to receive credits from the utility company when they produce excess electricity that goes back to the grid. These credits can then offset utility charges when homeowners use more energy than their panels produce.

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As an example, let’s say a homeowner’s solar energy system generates more than the power they need in one month, but not enough in the next month. In this case, the homeowner’s electric bill is offset by the net number of kilowatt hours previously given back to the grid. Net metering is beneficial for both parties as it can lower the solar customer’s electric bill and help the utility company better manage peak demand

Net metering compensates solar customers for the surplus electricity they produce, but the process varies from state to state. In Connecticut for instance, Eversource customers can apply online for net metering and there is no charge for installation of the net meter. Eversource updates the customer’s account each month, and usage is billed or excess power can be ‘banked’ each month over the course of a year. At the end of the year, a bill credit is applied to the customer’s account for any excess energy and the annual cycle begins again.

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Eversource customers can opt out of the net metering program with 30 days’ written notice. In addition, if the homeowner moves, they can cash out whatever credits they’ve accumulated between the start of the banking period and the date of the move.

The type of solar panels, weather, and other factors determine whether surplus electricity will be generated. Ideally, the system will generate enough power over the course of the year to match the customer’s total energy use.


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