By the end of 2023, over three million households in the U.S. had switched to solar energy using rooftop panels. While solar power offers plenty of benefits, the details—like how net metering works—can be confusing. Understanding the basics of net metering can help you maximize solar energy's financial and environmental benefits.

What Is Solar Net Metering?

Most rooftop solar systems are connected to the local power grid. Solar panels generate energy during the day, but most households don't use all the energy they produce. Without net metering, this extra power is sent to the grid without compensation.

Net metering changes that. It allows you to "sell" your surplus energy to the utility company and receive credits that reduce your future electricity bills. For example:

• On sunny days, your panels produce more energy than you need. This surplus is sent to the grid, earning you credits.
• On cloudy days or at night, when your panels produce less energy, you can use those credits to offset the cost of electricity you draw from the grid.

The exact terms of net metering agreements—like the rates for buying and selling electricity—depend on your utility company and state regulations.

Types of Net Metering

Not all states or utility companies offer the same net metering options. Here are the three main types:

Net Metering

• How it works: You send excess energy to the grid and receive credits to offset future electricity costs.
• Best for: Residential users in states where this is available.

Buy All / Sell All

• How it works: You sell all the energy your solar panels produce to the utility company at wholesale rates. Separately, you buy electricity from the grid at retail rates.
• Requirements: This setup requires two meters—one for tracking the energy you produce and another for the energy you consume.
• Best for: Users in areas without traditional net metering.

Net Billing

• How it works: Like net metering, you don't earn credits for excess energy sent to the grid. Instead, you're paid for the energy at a set rate.
• Best for: Commercial solar users or areas with limited net metering incentives.

Benefits of Solar Energy

Solar power has become popular for several reasons:

• Clean energy: Solar reduces your carbon footprint and dependence on fossil fuels.
• Lower bills: You can significantly reduce electricity costs by generating your own energy.
• Financial control: Solar gives homeowners more predictable energy expenses, making long-term planning more manageable.

Why Net Metering Matters

Net metering provides additional financial benefits for solar users:

• Save money: Homeowners with net metering can save hundreds—or even thousands—of dollars annually on electricity.
• Reduce grid strain: Sending excess energy back to the grid helps local utilities manage demand more efficiently.
• Environmental impact: Using renewable energy reduces the need for power from traditional electricity grids, which minimizes energy loss during transmission.

Alternatives to Net Metering

If net metering isn't available in your area, you can still make the most of solar energy with a battery backup system.

• How it works: Batteries store the extra energy your solar panels produce for use later when your system isn't generating enough power (e.g., at night or on cloudy days).
• Considerations: While batteries increase upfront costs, they allow you to rely less on the grid and give you greater control over your energy use.

Final Thoughts

Rooftop solar with net metering is a smart way to reduce energy costs and your environmental footprint. Even in areas without net metering, options like battery storage can help you get the most from your solar panels.

Remember: Solar works in all climates, but consecutive dark days can limit energy production. During those times, connecting to the grid—or stored energy—ensures your home stays powered. Net metering agreements offer a convenient way to balance your energy use and savings, giving you more control over your electricity costs.