What is Solar Net Metering?

Solar Meter Enphase

What is Solar Net Metering?

Solar net metering is a question we get when discussing solar panel installations. When considering solar as a way to power your home, you will inevitably stumble upon the realization that you consume electricity 24 hours a day. At the same time, the sun only shines about half of that time. How can solar provide all the energy your household requires when it only produces during the day? The key to getting around this fact is called ‘net metering.’ Here’s how net metering works in most areas in Texas for a residential solar panel energy system without a battery-backup system.

Solar Net Metering

How Solar Net Metering Works

Residential solar energy systems can peak in production during the morning, midday, or afternoon. These factors all depend on the orientation of the solar panels. For example, if they face predominantly toward the East, they’ll generate the most significant amount of solar energy at some time during the morning. When they peak in production, they’ll produce much more solar energy than can be utilized by the appliances in your house. This surplus energy is sent back to the electric grid, ‘spinning’ your meter in one direction. Conversely, when your AC turns on to keep your home comfortable while you sleep at night—since your solar panel system won’t be producing at that time—that energy is pulled straight from the utility grid, spinning your meter in the opposite direction. At the end of your billing period, what is read by your retail electric provider is the net result of all kilowatt-hours (kWh) of electricity that flowed through your meter in both directions, hence, net metering.

Solar Net Metering in Texas

Most electric markets in Texas are deregulated, meaning that the utility companies merely maintain the local grid infrastructure and ensure reliable distribution to the areas they serve. Homeowners within these deregulated areas have the freedom to choose whichever retail electric provider (‘REP’) they prefer. This REP will be responsible for setting the billing rate and billing for measured consumption. If your home is in a deregulated market, you’ll be able to switch to a ‘one-to-one’ solar-buyback plan with a REP such as Green Mountain Energy or Reliant Energy. With a 1:1 buyback plan, your account will be credited for each surplus of kWh generated that gets pushed onto the electric grid at the same per-kWh rate that you’re charged for each kWh of electricity that you pull from the grid. For example, if, during one billing period, you consume 1,000 kWh from the grid and contribute 850 kWh to the grid, you’ll effectively only be billed for the net difference of 150 kWh. A useful metaphor is to think of the local electric grid as a giant battery that you’re able to pull from or contribute to at will.

What is Solar Net Metering

Full Offset System Design | Net Metering

A typical approach to residential solar energy design is what we call a full offset system. With a full-offset system in place on your home, you’ll contribute to and pull from the electric grid at varying rates throughout the year, but by the end of a full, 12-month period, the amount contributed will be roughly equivalent to the amount consumed. In other words, the net will be zero. The full offset system setup is an ideal configuration because it effectively reduces a household’s electric bill to $0. Doing so provides the greatest return on investment by offering a complete alternative to paying higher electric rates and hedging against future escalation of those rates.

Thanks to net metering in deregulated Texas markets, solar adoption doesn’t mean having to plan out electric consumption to coincide with the day’s high-production times. We’re free to use electricity as we usually would while our solar energy systems do their thing. Want to learn more about net metering? Sunshine Renewable Solutions is your Texas solar installation company. We design solar panel systems with elements like net metering in mind. Contact us today to schedule your free consultation.

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