Net energy metering is a billing mechanism applied to electric energy. It allows consumers who have a renewable energy system that produces their own electric energy to send the surplus of the electricity production to the utility grid. In such situations, a consumer receives an energy credit. They can use this energy credit to their benefit when the amount of energy produced by, for instance, their photovoltaic system, is not enough to meet their current household energy needs. Then, the consumer can buy the electric energy at a rate minus the number of their credits accumulated at times when their renewable energy system was overproducing.
This method of compensation varies between states. Most of the time, a method based on a retail rate is used. When this method is applied, the quantity of accumulated energy credits offsets the energy consumed by the customer from the grid, generating a financial profit for the owner of a renewable energy system.