Net metering and solar energy export - Net metering and solar energy export mechanisms allow users to feed excess generated electricity back into the grid in exchange for energy credits or compensation. These policies promote the economic viability of solar energy and encourage greater adoption across regions.

Net metering and solar energy export policies are the foundational economic mechanisms that have historically driven the growth of the distributed grid-connected PV market. Net metering is a simple billing mechanism that allows customers to send any surplus electricity generated by their PV system back to the utility grid, receiving a credit on their electricity bill for the exported energy. The key feature of traditional net metering is the one-for-one exchange: the exported kilowatt-hour is credited at the full retail rate of electricity, effectively using the grid as a perfect, free battery. This straightforward policy provided a clear and compelling financial payback period for system owners, making solar a highly attractive investment.

However, as solar penetration increases, many utility companies have argued that this policy shifts grid maintenance costs to non-solar customers. This has led to a widespread transition away from traditional net metering toward alternative compensation models. Net billing is a common successor, where exported solar energy is compensated at a rate lower than the retail rate—often the utility's wholesale or "avoided cost" rate. This transition encourages customers to use the power they generate immediately (self-consumption) or store it in a battery rather than exporting it for a lower credit. These policies directly govern the financial viability and system design of grid-connected solar, with the shift toward lower export compensation directly accelerating the market for behind-the-meter battery storage.

FAQs on Net metering and solar energy export

What is the core principle that makes traditional net metering a powerful financial incentive for solar adoption?

Why are utility companies often motivated to transition away from the traditional net metering policy?

How does a policy that compensates exported energy at a lower rate influence the way a solar system is designed and used?