I understand the concept of it, but I want to get a better understanding of it in simpler terms to be able to explain to someone else
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Net metering is an arrangement with your electrical utility provider to credit your solar production at the same rate you pay. Hence ‘net’ since 1 kWh out cancels out 1 kWh in.
A non-net agreement would be something like you paying 12 cents for incoming and the utility paying you 3 cents for outgoing.
Net metering is favorable for the consumer and is what makes solar work from a financial perspective as the payback time is greatly lowered. There are other reasons to go solar but if looking just at ROI net metering is a must.
You generate your own electricity. If you generate more electricity than you’re using, then the extra electricity can be sold to your power company.
The meter is the device that measures your electricity usage. Kind of like how ‘net profit’ is how much money a company makes after subtracting expenses from revenue – net metering is how much your power bill is after subtracting the electricity you generated from the electricity you consumed. If you produce more electricity than you consume, you might end up with a negative electricity bill, i.e. the power company pays you instead of you paying them.
Net metering is almost always a mismatch trade between electric service (what you get from the utility) and electric generation (what you give back). Generation alone accounts for roughly 20% of the cost of full service electric delivery. So net metering when netted against bundled retail electric rate cannot be sustainable.
It’s just a matter of time before all net metering ends or the rates are unbundled and energy is netted against energy alone.
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