How to use solar to save money: An examination of net energy meters

The solar panels on top of roofs that are slapping the sun’s rays, are not just for show. They are part of an ongoing revolution in the way we manage and calculate our electricity. Here comes net energy metering . It’s an accounting system that credits solar panel users for the electricity added back to the grid. Intrigued? You should, especially if the monthly utility bill causes you to sigh more than a charred steak on a BBQ.

Imagine installing solar power. This will not only reduce your carbon foot print, but also lower that pesky electric bill. Here’s the scenario: During peak sun hours, solar panels could collect more power than your home requires. NEM does not waste this energy, but instead allows it to flow back onto the utility grid. You are credited for your contribution when the energy meter is literally running backwards.

Wait, there’s another surprise! When your panels sleep at night, or when it’s cloudy, you can pull power from the grid. Net metering is a relationship of give and take between your solar panels and the grid that allows you to have electricity 24/7.

You can think of it as a savings account where you deposit watts, instead of money. You can earn a dollar for every kilowatt of electricity you produce that is not used immediately. You want to get the most return on your investment, just like any smart investor.

NEM can be governed by different rules depending on the state you live in. Some states have favorable policies and can make you smile from ear to ear when you see your utility bill. Other states offer less significant savings, making the solar game more like a chess match.

As you consider whether to invest in solar, you may come across terms like “net-metering cap” that could put a kink in your plans. This cap limits the number of customers that can participate in Net Metering. It’s usually expressed as a percentage based on peak demand. This cap is a way for the utility to keep a tight grip on the reins and maintain an equilibrium that does not tip the financial eco-system too much in the favor of solar customers.

When deciding whether to switch to solar, it is important to consider future policies. Legislation changes like sand dunes – what is good today could be changed tomorrow. Smart homeowners will keep an ear on the ground to hear any hints of a possible policy change.

It’s not just about financial gain. Who doesn’t want to be referred to as “the eco-friendly neighbor?” Solar panels can increase your home’s value, in addition to the altruistic aspects. It may not be as attractive as you think. A sleek array could attract buyers because of the reduced energy cost.

Toe-dipping in solar waters is refreshing, but requires a little foresight. Let’s say your system is producing more power than you can use. It’s tempting to think that credits can be accumulated indefinitely. However, they don’t. After a certain period of time, they may expire. This will force you to plan how much energy you use versus what is produced.