What is “Net Metering” and how does it work?

When using a grid-tied solar system, power from the solar kit is used as a supplement to the power grid that is feeding your house. During peak hours, when the most energy is being used, the load is usually more than the PV system can provide and the needed extra energy is taken from the power grid (and adds to your monthly power bill). However, during periods when electricity use is very low, such as everyone in the household being at work and school, the PV array will be producing more energy than is being used up from the house. In cases like this there is excess electricity being generated that can be sent back to the grid using special inverters. The process of keeping track of this excess and deficit of energy use is called net metering, as it is the net difference between how much power is being produced and how much power is being used up. When excess power is generated and sent back to the grid the special meter will actually reverse your listed energy usage, thereby directly shrinking your monthly energy bill. It is important to note that although grid-tied systems can significantly reduce an electric bill, it will not reduce the bill to $0 as there is always a fee charged for being connected to the power grid that is separate from the electricity usage bill.