What Is Net Energy Metering?

One of the most frequently asked questions for solar homeowners is what net energy metering (NEM) is and how it works.

NEM is a credit on your electric bill that represents the full retail value of electricity delivered by your solar electric system. This means when your solar panels are producing more energy than your home is consuming, your surplus power will flow onto the grid and help power the rest of your community. As your electricity flows onto the grid, you earn a credit which is used when you consume more energy than your panels are producing (e.g. at night, when it’s raining, etc.). Net metering allows solar to be a viable energy option because our power demand is not perfectly aligned with solar production.

Solar Home Image Credit: Center for Sustainable Energy – energycenter.org

At the end of your billing cycle, on the 12th month, you will “true-up” with your utility company and pay the remaining balance on your electricity bill if you consumed more energy than you produced or receive a net surplus compensation if you produced more electricity than you consumed.

For more answers to common solar questions, check out Solar.com’s Solar Education Page.