Most homes with rooftop solar panels are net metered.

If you’re thinking of installing a solar panel system on your home or business, then you need to learn about net metering and whether you are eligible to receive the benefits. As a provider of solar net metering in Texas, Chariot Energy is an expert on the subject, so we wanted to share the details of this type of energy agreement and help you get a bigger return on the investment from your home solar panels system.

With net energy metering, residential customers with rooftop or ground-mounted solar systems have the opportunity to sell the excess electricity their photovoltaic (PV) systems generate during daylight hours.

What is Net Metering?

Net energy metering (also referred to as NEM) is a unique billing system in which solar panel system owners receive credits on their electricity bills for excess solar energy generated by their PV system. During the day, a residential customer’s solar panels will often generate more electricity than their home needs. 

With net metering, their excess electricity is added to the electric grid, and the utility company credits the customer for their energy. Customers only pay for their net usage—their total usage minus the amount of bill credits received. Even better, for customers with significantly large solar energy systems, they could in theory zero-out their electricity bill for the entire year! Imagine that: no electricity bill. 

In simpler terms, net metering is like if you’re a mini solar energy generator. When your panels create more energy, your neighbors get to enjoy the benefits of renewable energy and use your solar power! Cool, right?

How Does Net Energy Metering Work?

On sunny days, most rooftop solar systems generate more energy than the home needs, especially during the week when people are either at work or school. When this happens, your electricity meter runs in reverse. Instead of receiving electricity, you’re actually giving it away.

Of course, there are energy storage options available like lithium batteries that can store your solar electricity for later use at night, but in most cases, it’s added to the local electric grid to power neighboring homes and businesses with your clean energy. 

By comparison, when your panels don’t produce enough solar power to meet your energy usage, your meter draws power from the electric grid like it did before you installed solar panels. Therefore, NEM is not an “off the grid” situation.

Throughout the month, your home’s electricity meter monitors your total electricity usage for the month and compares it against how much electricity your solar panels generated and added to the grid. At the end of your billing cycle, you’re only responsible for the net energy consumption. 

”Total energy usage − Energy added to the electric grid − Electricity used from your panels” 

If your solar energy generation is more than what your home used in the billing cycle, your electric provider won’t charge you for that month, and they will credit your next month’s bill. 

Benefits of Net Metering

From saving money to easing the demand on your local electric grid, net metering reveals several benefits: 

Save Hundreds in Utility Costs 

Net metering empowers you to fully take advantage of your solar panels, saving you hundreds, if not thousands, of dollars in energy costs each year. 

Promote Renewable Energy Adoption

You can create your own clean energy for your home — and for your neighbors. It provides your home and your surrounding community with emissions-free energy. 

Reduce Strain on Power Grid

Solar panel owners help electricity generators manage their electricity loads. By sending power to their local community, solar panel owners also help prevent losses from long-distance electricity transmission and distribution.

An Electricity Plan for Solar Panel Owners

Since you need the grid during times when your solar panels don’t produce electricity (i.e. at night or on cloudy days), you still need an electricity plan. Net metering is a special type of plan offered by only a few REPs. NEM eligibility varies widely and depends on several factors, including state legislation, regulations, and policies. Chariot Energy happens to be one of the few REPs in Texas that offer net metering as an energy plan!

What About Energy Storage? Couldn’t I Just Store This Extra Electricity?

Unfortunately, battery storage technology is still in its early stages, making it very expensive, inefficient, and costly. Perhaps the most advanced renewable energy storage device on the market today, Tesla’s Powerwall costs around $6,500 for one solar storage unit — and they recommend that the average residential home install two.

Thus, most rooftop solar owners currently opt for a net metering setup. Still, we’re optimistic that solar storage will become more affordable in 10 years. Just look at how rapidly the costs for solar panels have dropped in the last decade! 

Does My State Have Net Metering Rules?

U.S. electricity grid at night

Whether you already have solar panels installed on your roof or you want to buy them, you should first check if your state offers net metering and whether there are any policies in place around them. This could make all the difference in how quickly you pay yourself back for investing in rooftop solar for your home. 

Currently, 38 states have mandatory net metering rules, and two states — Texas and Idaho — have voluntarily adopted net metering programs. This means only some utilities in Texas have policies for the program. 

Who is Eligible for Net Metering in Texas?

Speaking of the Lone Star State, this is where Chariot offers NEM plans. You are eligible for net metering if:

  • You are in a deregulated area of Texas (you can pick your electric company);
  • You have an interconnection agreement with your utility company (the four utilities in Texas are CenterPoint Energy, AEP Texas, Oncor Electric Delivery and Texas-New Mexico Power); AND
  • You have a smart electricity meter installed by your utility.

If you’re interested in learning more about solar panels, check out our Chariot University page for our solar panel-related content. You can also learn helpful green living tips, ways to save energy, and more.