Net metering allows residential and commercial customers who generate their own electricity from solar power to sell the electricity they aren’t using back into the grid. Many states have passed net metering laws. In other states, utilities may offer net metering programs voluntarily or as a result of regulatory decisions. Differences between state legislation, regulatory decisions and implementation policies mean that the mechanism for compensating solar customers varies widely across the country
Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a PV system on their roof, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods when the home’s electricity use exceeds the system’s output. Customers are only billed for their net energy use. On average, only 20-40% of a solar energy system’s output ever goes into the grid, and this exported solar electricity serves nearby customers’ loads.
Giving Customers Control Over Their Electricity Bills
Net metering allows utility customers to generate their own electricity cleanly and efficiently. During the day, most solar customers produce more electricity than they consume; net metering allows them to export that power to the grid and reduce their future electric bills.
Net metering provides substantial economic benefits in terms of jobs, income and investment. Net metering increases demand for solar energy, which in turn creates jobs for the installers, electricians, and manufacturers who work in the solar supply chain. Today, the solar industry employs more than 230,000 American workers in large part due to strong state net metering policies which have allowed the solar industry to thrive.
Protecting the Electric Grid
Unfortunately, some utilities perceive net metering policies as lost revenue opportunities. In fact, net metering policies create a smoother demand curve for electricity and allow utilities to better manage their peak electricity loads. By encouraging generation near the point of consumption, net metering also reduces the strain on distribution systems and prevents losses in long-distance electricity transmission and distribution. There are a wide variety of cost-benefit studies around the country that demonstrate the value solar provides to local economies and the electricity system as a whole.
Want to support net metering policies in your state? Advocate for solar energy. Your voice counts!
Want to learn more about how net metering policies work with solar? Learn more about net metering and other solar topics on EnergySage.
Click on the map below to visit the Database of State Incentives for Renewable Energy (DSIRE), which catalogues various policies for renewable energy nationwide, including net metering. 38 states plus Washington, D.C. and Puerto Rico have mandatory net metering rules in place.
How does a transfer of solar panel ownership work?
When you buy or sell a property with solar panels, the easiest route for all is when the solar panels are fully paid off. This is the ideal situation for a smooth transfer of ownership.
If you are buying or selling a home equipped with a leased solar system, this could mean a third party owns the system. As a seller, you will want to attempt to transfer the lease to the new potential owners. Sharing the benefits you received with the solar system may be a great way to help new owners feel confident in taking over the payments. Inform then on the details, like if the third-party owner covers issues since they are leasing solar panels. This releases the new homeowner from paying out of for repairs, leaving them only to consider regular cleaning maintenance, which may be a selling point for some.
Here’s the general process:
- The homebuyer signs an ownership transfer form
- An attached credit application is sent to the solar company
- Once approved, there’s a new lease transfer, and the new homeowner will take over the payments
- The seller and buyer will sign over ownership; the new homeowner will take over new ACH payments
- An interconnection approval from the utility must be received
If you go the secured loan route, the rest of the loan will need to be settled. If an unsecured loan was the option you chose, as long as it is not tied to the property, you could sell the home; however, you remain responsible for paying off the loan.
It would be great to include this guide in your home buying and or selling process. Print it, screenshot it, and share it with the seller or buyer; these are the questions you want to make sure are answered and fully understood.
Questions to ask when buying a home with solar:
Is the solar energy system owned or leased?
Companies that manufactured the panels?
What are the warranty terms? Can I get extra warranty coverage?
How big is the solar energy system?
Is net metering available?
What are the benefits of selling a home with solar panels?
Depending on who you ask, you will encounter countless reasons a person wants to get solar, and the benefits may differ for each of them. When that time comes, and you decide to sell your home, whatever the reason is, you most likely want to sell your home and receive the biggest offer. Solar may be an added value to a home, and a Berkeley Lab study found that buyers were willing to pay 15,000 more for a home with a solar system.
A solar system may increase your home’s value and help your home sell 20% faster. This means everyone benefits, including appraisers, real estate agents, mortgage lenders, sellers, buyers, and not to mention the environment. One very common value point, especially as the cost of fossil fuel continues to climb, is the promise of lower or no electric bills.
As a seller, you can inform the new buyer of the cost savings you’re currently receiving on your electric bill with your clean energy source. The knowledge of a reduced carbon footprint is another selling point for some buyers. Sellers now have the advantage of selling their home at a higher price point, at a faster rate, with the potential to receive their total ROI of what they put into the system.
What are the benefits of buying a home with solar panels?
When it comes time to buy your home, and the property you choose comes with a preinstalled solar system, you have significant benefits to reducing your energy bill. You are doing an outstanding environmental service, reducing your carbon footprint, and relieving our collective reliance on fossil fuels.
With more severe weather conditions affecting energy grids and rising energy prices, investing in renewable energy, particularly solar energy, can put you and your family in a better position. One step further is investing in battery storage, putting yourself at a decisive advantage in energy independence. As EV cars surge in popularity and gas skyrocket, charging your electric vehicle at home from your own panels will make much more sense heading into the future.
Whether you have solar panels or a solar system with battery storage and an EV to charge, you want to make sure your entire system is equipped with the best warranty so you can enjoy the benefits of your solar investment.
Selling Electricity Back to the Grid
When homes or companies make more electricity than they need, they can sell that energy to the grid in a few different ways. Here are the methods they can use and why one might choose a particular option.
Solar Renewable Energy Certificates
Solar renewable energy certificates (SRECs) allow people to earn money for every additional megawatt hour the system produces. They exist because utility companies must offer a specific amount of renewable energy, which they can either generate themselves or pay others to provide — such as homeowners or businesses. Utilities buy renewable energy credits from these sources to prove their renewability, therefore incentivizing individuals to go renewable.
The value of SRECs depends on demand and how much a utility company has to pay for not being compliant. If there are many SRECs, the price will decrease as there is less of a challenge to find them. Additionally, some states have alternative compliance payments (ACPs) the utility will pay for not producing enough renewable energy. Those charges vary by state, so if the fee is low enough, a utility company will likely pay the ACP instead of buying SRECs, driving the price down.
One of the benefits of going the SREC route is it can raise the value of a building when selling it. While the owner could keep the rights to sell the SREC, transferring those rights to whoever successfully buys the property is common practice. That can be an enticing negotiation tactic for the seller, allowing them to barter for more money.
Net metering will automatically send the excess power a building produces to the grid, allowing the owner to save the energy they don’t use and get it back from the utility when the panels don’t make enough. The utility company charges them for the power they use minus what they generated, leading to a more accessible way to switch to solar.
This tactic is valuable because it can help a property owner transition to solar power much more accessibly. The utility company banks the excess electricity and gives it back to the individual when their panels can’t make enough to power the building. In turn, the home or business owner’s power bills are lower, making the switch much more efficient. Those credits can be instrumental in places where the weather switches from sunny to cloudy unexpectedly.
Like net metering, net billing automatically sends the excess power to the utility company. However, they do not bank that energy — instead, they will pay for the electricity wholesale. Thus, the building owner gets a direct monetary return for the extra power that goes to the grid, which can entice those who want an immediate return.
While tax incentives are available to make installation costs cheaper, solutions like net metering can help recover what home and business owners spent faster. Those savings on energy bills — plus the rebates one can get for going solar — make solar panels pay for themselves and go on to keep earning the owner profits. Opting for net billing can also help someone pay off their solar panels sooner rather than later.
Can You Make Money Selling Electricity?
Yes, selling electricity can make a home or business owner money — though those returns will vary depending on which selling option they choose. Additionally, how much they make will change from state to state.
Dynamic Solar Export Limits, 25-year Panel Product Warranties, Disposing Of Unwanted Solar Panels
Because the value of SRECs fluctuates, it is challenging to nail down exactly how much they will earn solar panel owners. However, a solar panel system will generally earn a building 10–13 SRECs in a year. Someone in Washington D.C. could get around 300 per SREC — garnering nearly 4,000 annually — but someone in Ohio might only receive up to 52 a year. Location and demand are crucial when determining how much a property owner will receive from SRECs.
Net metering does not incur a direct monetary return but will provide discounts on monthly electricity bills. The cost savings of this method and net billing are also tricky to average because the rates can vary so widely per state and day. However, those cost reductions on electricity bills or additional funds will certainly add up to make solar energy more affordable.
The Process of Selling Excess Solar Energy
Selling excess energy involves several steps from start to finish:
- Installing solar panel systems
- Connecting to the electric grid
- Monitoring solar energy generation and consumption
- Receiving credits for excess energy
A solar energy professional can guide you on the appropriate size and configuration of a solar panel system that meets your needs. Once it’s installed, it needs to be connected to the energy grid.
This process typically demands approval from the local utility company. It may also involve an inspection of your solar panel system.
Monitoring electricity generation and consumption helps solar panel owners ensure they’re maximizing their buyback potential. This is done through the use of energy monitoring software, or by hand by regularly reviewing electric bills.
Maximizing Your Returns
Firstly, your solar panels must be positioned to maximize their energy generation. That means they should be installed at an optimal angle in the best place to receive as much sunlight exposure as possible. Regular maintenance and inspection help to keep energy generation high.
For instance, if a solar panel is obstructed by dead leaves in the fall, its efficiency will be drastically reduced because less sunlight reaches its surface.
Secondly, implementing energy efficiency measures within your property will reduce the amount of energy you need. Lowering energy consumption and upgrading your heating insulation are two examples.
Finally, some solar panel owners install battery storage systems. The batteries store excess energy for use during periods of high demand or low sunlight, such as during the night or throughout the winter months. This further reduces your reliance on the electricity grid, saving you more money in the long run.
Solar Buyback Regulations and Policies
In Texas, solar buyback varies depending on the utility company serving the area. However, there are several state-wide policies in place to support solar energy production.
These include the net metering and energy credits we covered above, as well as solar tax incentives and interconnection standards. Tax incentives in Texas can drop the effective price of solar panel installation by around 30%.
Interconnection standards ensure safe, reliable connections between solar panel systems and the wider energy grid.
Go Solar Sooner
Solar buyback makes solar energy more attractive for home and business owners.
In Texas, buyback is becoming increasingly popular due to the state’s abundant sunshine and progressive policies. As the cost of solar continues to shrink, the cost savings can only go in one direction:
Warranty And MOVING Solar Panels, WHAT HAPPENS?
It’s time for energy to move in a new direction. At Chariot Energy, we deliver affordable 100% solar solutions. Click here to get started figuring out the best solar plan for you, or get in touch with Chariot by calling us at 855-524-2746.