What is net metering in solar energy?

What is net metering in solar energy?

Net energy metering (also referred to as NEM) is a billing mechanism that allows a customer to store the energy generated by their solar system in the electric grid. This approach lets the consumers use this energy when their solar panels are underproducing by withdrawing it from the energy company at a reduced rate.

Billing company approaches to net metering

Utility companies allow their customers, who produce energy with solar systems, to store their excess in a Virtual Energy Storage System (VESS). This is a tool, which lets them combine that factor with the energy consumption in the net metering. It lets customers store the produced energy in the form of a credit to be used when their household is not producing it.

Monthly net metering

The amount of energy in the Virtual Energy Storage System is calculated on a monthly interval. At the end of a month, the amount of credits is reset and can be build up again over the next month period. This allows customers to use the power generated from their solar system during the day, at night when the sun goes down.

Annual net metering

The credit of the produced solar energy is stored for 12 months. At the end of that period, the amount of the energy stored in the grid is lost and the calculation of the credits resets. This approach allows a customer to use the surplus of solar energy generated over summer during less sunny winter months (withdraw the energy).