Can You Profit From Your Home Solar System? (Net Metering)

Yes, you can profit from your home solar system by the method called net metering. In this method, you can export excess units your solar system produces, to the grid and get credits for it. But the way this net metering works depends on the rules and regulations of the state or the country you are living in. 

According to the rules and regulations of many countries, this method is mostly a way of reducing your expenses than an additional income.

How net metering works?

When you are registered to the net metering system then you can supply the excess power units your solar system produces to the grid. One unit you supply to the grid is equal to a unit supply from the grid.

The excess units your system produced current month/ months will be credited towards the future months that your solar system produces less number of units and will compensate for the units you consume from the grid.

Let’s clear things more with an example;

Let’s say that your solar system had produced 120 kW during a previous monthly billing period and you only had used 100 kW. Then you have an additional 20 kW. But in this month your system only had produced 80 kW but still, your monthly consumption is 100 kW. That means you have to get 20 kW from the grid. But you will not be billed for this usage. The reason is you had supplied 20 kW to the grid in the previous month.

What do you need to join the net metering system?

• You should have an on-grid solar system.

On-grid solar systems are not completely isolated from the grid. They have a connection with the grid. So that allows you to import and export power from the grid. So you can import power when your solar system produces less power and export power when your solar system produces excess power units.

• Your solar system capacity has to be within the range recommended by the rules and regulations of your state or country.

If you want to join the net metering system, your solar system capacity should be under a certain limit. This limit is different between countries and even states.

For example, some countries/ states limit your solar system capacity or the monthly production rate to be less than 100% of your average monthly usage. Some countries allow your capacity to be around 200%.

As the rules and regulations associated with net metering are different between countries/ states, what you need to be qualified to enter a net metering scheme is different. So check your own country’s/ state’s rules and regulations about this.

How can you earn money from net metering – net billing?

Earning money from the net metering system is not possible in every country. But some countries pay you for the extra power units you supplied to the grid. This is called net billing or net accounting.

In this process instead of reducing the credits from the future bills, you will get paid by a chequeen for the exported units. 

Your solar system (1) via an inverter (2) interfaces to your household meter box (3) which powers your household appliances during the day for free. When your daytime solar power generation is greater than your household demand (4), it will be redirected back to the grid enabling the homeowner to sell surplus solar electricity back to the electricity retailer which generates credits (5) to offset the cost of power drawn at night.

Here the exported unit price is not the same as an imported grid unit price. So you will get paid according to the price set by your country or state. Most of the time this set price is lower than the grid power unit price.

Why entering a net metering system is advantageous?

We cannot expect constant sunlight throughout the year. Even though you may have a battery it might be not enough for the whole winter season. In some areas going off-grid is possible. But for some areas being on-grid is a better option as the grid act as a huge unlimited battery for you.

Net metering allows you to invest the extra power units you produced during sunny days for the gloomy days, instead of letting them go to waste. So you can pay less for the units you have used during gloomy/ winter days as you had paid them with your power units during sunny/ summer days.

The net metering system is not equally advantageous for every country/ state. The reason is the weather condition is not the same in every country/ state and the rules and regulations set by each state/ country is different.

Is A Bigger System Better for making money from net metering – net billing?

Not always. Some electric utilities will not allow you to 'sell' your surplus electricity back to them. Generally what they offer is a credit system. For each month that you over produce electricity and push it into the grid tied system the electric company will credit it to your account. Then in the winter months when your PV system is producing less electricity your energy credits are used up as you draw power from the electrical grid. On your anniversary date, the date that your photovoltaic system went live, the account is reset to zero and you start over accumulating credits.

Buying a system that meets all of your home's power needs and then some will cause you to lose the credits that you have accumulated by your anniversary date. You also have to take into account the purchase cost of the solar array system.

So don’t go building your solar power for homes system larger than you need, banking on making money in this way! There will always be some charges from the power company, normally amounting to about $10/month, for things like reading your meter and maintaining the grid.

Why net metering/ net accounting is not a good income method?

Most of the countries/ states do not pay for the exported units. That means the net accounting system is not functioning in many countries or states.

Even though some countries/ states have a net accounting system due to the system capacity limits set by the state/ country will limit the extra units you can supply to the grid. Also, you will get paid a very limited amount of money per unit. So you cannot expect much income from this method.

Conclusion

A net metering system is a system that helps you to invest the extra power units produced by your solar system for the days your solar system produced fewer power units. It will help you to compensate for the units you used from the grid. So this greatly helps you to decrease the amount you have to pay during winter/ gloomy days.