Net Metering
Net metering represents a billing arrangement where excess electricity generated by customer-owned systems, typically rooftop solar installations, is credited back to the customer's account at retail rates rather than being purchased at wholesale prices. This mechanism effectively allows customers to bank excess generation for use during non-production periods, creating a virtual storage system through the grid.
The policy has been instrumental in solar PV adoption, particularly in distributed generation markets, by providing fair compensation for exported electricity. Net metering policies vary significantly by jurisdiction, with some states offering full retail crediting while others provide wholesale rates or time-of-use adjustments.
As solar penetration increases, many jurisdictions have implemented net metering caps, minimum charges, or transitioned to more sophisticated value-of-solar-tariff structures that better reflect the grid value of distributed generation. The economic impact includes accelerated rooftop solar deployment while creating billing complexities for utilities managing bidirectional energy flows and grid infrastructure costs.
Technical Details
- •Crediting mechanisms: Full retail rate, wholesale rate, time-of-use adjustments
- •System eligibility: Typically limited to 100kW-1MW installations, varies by jurisdiction
- •Billing periods: Monthly rollover, annual true-up, or real-time crediting
- •Grid impact: Bidirectional power flows, voltage regulation challenges, infrastructure costs
- •Policy evolution: Caps implemented in 40+ US states, transition to value tariffs
Why It Matters
Net metering policies directly influence distributed energy economics and adoption rates. In Tera Intelligence Platform's Asset Intelligence module, net metering data helps residential and commercial customers evaluate solar investment returns under different regulatory frameworks. Utilities use net metering intelligence to forecast billing impacts and plan grid infrastructure investments, while policymakers monitor program performance to ensure equitable compensation. The platform's comprehensive database of distributed generation assets and regulatory frameworks across 130+ countries enables stakeholders to compare compensation mechanisms and identify optimal deployment strategies.
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