One of the major perks of making the switch to solar energy is that you can save money on your electric bills through billing mechanisms like net metering and SRECs. With net metering, you can save up any unused energy that your panels produce and then “sell” it back to your utility company for credit on your electric bills. It’s a great way to save money, but you can also sell SRECs to your utility company and make money to help offset your solar installation costs. You might be wondering, “How can I start saving money by selling solar power back to my utility company?” Follow these steps and you will be saving money in no time!
Net Metering & SRECs
As mentioned above, net metering is a great way to save money by “selling” the extra electricity that is generated by your solar system back to your local utility company’s grid. You are not actually selling the energy for money, instead you are exchanging it, in a sense, for energy that you can use when your solar energy system is not producing as much energy. The great thing is that net metering often allows you to exchange your electricity at the retail rate, which means it’s worth just as much when you sell it back as when you purchase it from the utility company.
So how does it work? Well, if your solar panels produce more electricity than you are using at any point during the day, the electricity will be sent back to the grid, running your electric meter in reverse. On the other hand, on very cloudy days or at night, when you use more electricity than your solar panels are producing, you might take electricity from the grid, running your meter forwards. At the end of the month or year, you are billed or credited for the net of the energy you put into the grid versus what you used.
You can make actual money, though, by selling SRECs, or solar renewable energy certificates, to the utility company at the market rate. For every megawatt-hour (1,000 kWh) produced by your system, you will get one SREC. Generally, you can estimate the number of SRECs your system will produce by multiplying the size of the system by 1.2. For example, a 5-kilowatt system will produce approximately 6 SRECs each year. The price of these certificates will vary by your location, ranging anywhere from $5-$500.
Can You Take Advantage of Net Metering?
So how do you get started with net metering? First, make sure you know your utility company’s interconnection standards, which is how renewable energy systems can be legally connected to the electricity grid. Once you find this out, you will know how much you can sell back to the company, since the rules and rates for selling electricity to the grid vary by state, as well as by utility company. Currently over 40 states allow some kind of net metering.
Next, you’ll have to determine if your solar energy system is generating more electricity than your home or business needs. Examine your electric bill and determine what your average use of electricity is; if you would like to be able to sell electricity back to the grid you will have to install a solar panel system that will generate more than enough energy to cover your needs.
If your state and your local utility company allow net metering, and if you’re generating enough energy, your last step is to contact your local utility company and get set up to get credit for the excess energy you produce, so you can use it at a later time. If you want to make money instead of exchanging your energy with the utility company for credit, you can choose to sell your SRECs, by either:
- Finding a buyer– You can make an agreement with a broker like solsystems.com, who will sell your SRECs directly to the utility on your behalf for a small portion of your profits
- Selling them upfront– You can sell the rights to all of your SRECs through a solar installer or a financing company for immediate returns on your installation.
- Sell them yourself – You also have the choice to sell them through a self-managed account, such as FlattExchange, which can be risky if you do not know how these accounts work.
Installing a solar panel system is a great way to help the environment – and your wallet. You will save a lot of money on your electric bill, because not only can you get incentives, such as solar investment tax credits, but you can also sell excess electricity back to your local utility company. Taking advantage of programs like this will mean you’ll get a return on your investment as quickly as possible, which will eventually lead to decades of free solar energy!
It can take a lot of work to find the right solar company and the right solar power system for you, but our highly trained agents can make things easy for you. We work with the top-rated companies in the country, and can compare all solar plans in your area to find the best one available. To get free instant quotes, simply enter your zip code in the bar on our homepage, or to speak to a licensed agent, call 888-290-3112.