Net metering, or also known as net energy metering (NEM), is another big reason that solar panels are a good investment for your home or business.To explain net metering simply, it is when your solar panels produce excess power and feed energy back to the grid. Net metering also means that your home maintains a connection to the grid even after you install the solar panels. This grid connection ensures that you still have power regardless of daily or seasonal variations in solar panel production levels. The utility company compensates you for the excess grid supply with credits that are added to your electric bill. For the purpose, a “bi-directional” or “net-meter” is installed which registers both the energy that you consume from the grid and the excess solar energy that you export to the grid. Monthly net metering allows consumers to use solar power generated during the day at night.
Similarly, during the spring and summer months when the sun is shining and your panels are producing more electricity than you need, that extra energy goes to the grid. Then in the winter when the days are shorter, you can draw on those energy credits to help offset some of your energy needs.
Net metering originated in the United States, where solar panels and small wind turbines were connected to the electrical grid, and consumers wanted to be able to use the electricity generated at a different time or date from when it was generated. In 1979 an apartment complex and a solar test house in Massachusetts were the first two projects to use net metering. Minnesota is commonly cited as passing the first net metering law, in 1983, and allowed anyone generating less than 40 kWh to either roll over any credit to the next month, or be paid for the excess.
Keep in mind, however, that net metering policies can vary significantly by country and by state or province. It is not available everywhere in the U.S., which means that there is a need for other nighttime power supply options such as solar battery storage.
Net metering was slow to be adopted in Europe, especially in the United Kingdom, because of confusion over how to address the value-added tax (VAT). Only one utility company in Great Britain offers net metering. In Canada, some provinces have net metering programs.
