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What is net metering?

According to the Solar Energy Industries Association ,Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a PV system on the home’s rooftop, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods where the home’s electricity use exceeds the system’s output. Customers are only billed for their “net” energy use. On average, only 20-40 percent of a solar energy system’s output ever goes into the grid. Exported solar electricity serves nearby customers’ loads.”

Only investor-owned utilities with monopoly service territories were legally required to offer net metering to their customers.  Different utilities have different net metering policies. Here is what Duke Energy Indiana says about renewable generating options and net metering in its territory

Rural Electric Member Cooperatives (REMCs) and municipal utilities are not required to offer net metering. There are 38 REMCs in Indiana, each with its own renewable energy practices and policies. Drill down on this REMC map to see their websites for more information.

There is a power struggle (pun intended) over net metering as monopoly utilities and their supply chain partners try to keep marketplace control and consumers try to gain energy independence. The legal and regulatory situation changes frequently. For an annual overview of “The state of net metering in the United States,” see Solar Reviews.


Category: Financial Issues, Utility Customers

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