There are many ways you can save money when you have a solar energy system. Two of these ways are billing processes known as net metering and net billing. These are two different concepts that people often confuse, and it is essential to understand them so that you can get the most savings.
Net metering is a billing process that is available in almost every state. It allows you to sell any extra solar electricity that your system produces back to your local utility company. You might not use all of the energy that your solar panels produce on very sunny days, so if you have a surplus, your utility company will either give you money back, or a kWh credit, which you can use on cloudy days or at night.
Depending on your state, some utility companies offer different net metering options that will allow you to earn varying amounts of money each month when you sell your unused electricity back to the grid.
Net Billing Explained
Net billing is a different billing process that allows you to buy back the excess energy that is generated by your solar energy system from your utility company for less than it would cost for you to buy it as a non-solar customer. In other words, in this case, when your solar energy system produces more energy than you use, you will be treated like any large-scale energy producer or power plant selling energy to the grid. Instead of a credit on your utility bill, you will get a dollar value based on the supply rate of electricity.
For example, if your retail rate is $0.15, your supply rate could be around $0.05, meaning you will have to pay $0.05 per kWh to buy back your solar-generated electricity from the grid.
Should You Go Solar with Net Billing or Net Metering?
You might be unsure which type of billing process is right for you, so the first thing you should do is check if your electricity usage matches your system’s production. If you get a lot of sunlight and are producing enough, or more than enough, energy to power your home, you might want to stick with net metering, since net billing makes your excess electricity less valuable, which could cost you money in the long run. In addition, if you’re using most of your electricity during the day when your system is producing the most energy, you’ll want to go with net metering, so you can use all of that power being produced and not have to worry about it being devalued later on.
On the other hand, if you use most of your electricity at night (which is typical for people when they come home from work and kids are home from school), you will be pushing most of your solar energy to the grid during the daytime. This means less of a financial return from your solar energy system, so you might want to try net billing, which would allow you to purchase any necessary excess energy at a cheaper rate.
In our eyes, net metering is hands down the better option for households that produce enough solar energy, because your extra solar-generated electricity will be worth more. With net billing, your solar-generated electricity is sold to the utility company at a lower rate, meaning you’ll have to pay a little extra to pull energy from the grid.
Have questions? Go Solar Energy can help! Our agents are highly trained and knowledgeable in the solar industry and can assist you with any questions you have. If you are interested in installing a solar energy system in your home or business, we can compare quotes from the top-rated companies in your area and find you the best plan with the most efficient solar panels – and we’ll save you money. Get started by entering your zip code in the bar on our homepage, or for free quotes and guidance from one of our licensed agents, call 888-290-3112.