As a solar installer, I get this question a lot. A potential customer talks about how they have a large amount of available unshaded roof space and they would love to get paid by their local utility for generating electricity on their roof for other consumers. I’m sorry to let everyone down, but that’s not exactly how it works.

Many states have worked out an agreement for renewable energy generation with utilities called net metering. Net metering is a special billing arrangement that allows customers to get credit for the full retail value of the electricity their photovoltaic (PV) system generates. Under this agreement, the customer’s electric meter tracks the surplus electricity generated by the solar electric system and the electricity that the customer consumes. The customer only has to pay for the net amount (consumption minus usage) of electricity they use.

With net metering, it doesn’t matter when you use or generate electricity if you pay a flat rate. If you generate excess electricity during the day when you’re not home, it may go to feed your neighbor’s consumption. Conversely, it doesn’t matter that most of the electricity you’re using at night is coming from the utility, not your photovoltaic system. A consumer in a state without net metering would have to size the system to accommodate their highest possible daily demand and wouldn’t be able to feed their excess energy in to the grid. The only alternative to capturing surplus electricity would be a battery back-up system which tends to be a lot more expensive than a system designed to be grid-tied.

More than 35 states, including Massachusetts, Connecticut, and Rhode Island, have net metering standards in place today. Most states mandate that utilities pay the retail rate for surplus generation from photovoltaic systems. Rhode Island differs from other states because consumers would receive slightly less than the the retail rate of electricity for excess production. In addition, most states with net metering allow a rollover of credits until the end of their 12-month billing cycle, while some states allow credits to rollover indefinitely. Currently, California is the only state where you have the option to receive financial compensation for net excess generation. Therefore, it’s the only state where you can get actually get a check for generating electricity from your PV system.

Example of Net Metering:

Example 1 – Customer Uses More Electricity Than They Generate

A customer uses about 10,000 kilowatt hours of electricity and their PV system generates 8,000 kilowatt hours. The customer would only pay their electric company for 2,000 kilowatt hours.

Example 2 – Customer Generates More Electricty Than They Generate

A customers uses about 8,000 kilowatt hours of electricity and their PV system generates 10,000 kilowatt hours. The customer would receive a credit of 2,000 kilowatt hours. Net excess generation may rollover until the end of the billing year or may rollover indefinitely. Except for California, consumers won’t have the option to be paid for excess credits from their utility.