What it means
A building can use its own generation immediately, and when it produces more than it needs, excess power can flow to the grid if interconnection is approved. At another time it may draw power from the grid, and a net metering scheme measures or credits the two flows under specified rules.
A simple energy example is 30,000 kilowatt-hours imported and 8,000 exported in a period, so net imported energy is 22,000 kilowatt-hours, before considering rates and charges. Do not treat that subtraction as every bill, because some programmes value exported energy at a different rate or apply fixed charges, and the actual financial credit follows the tariff.
Net metering is policy-specific, so a rule in one country, state or emirate cannot be assumed for another, and you should check the regulator and utility serving the property. Check eligibility, because a scheme may limit system size, technology, customer class or whether generation is on the same site.
Check interconnection, since approval and a suitable meter can be required before export and installing panels does not automatically create a right to feed the grid. Understand the meter too, as modern systems may separately measure imports and exports, and a displayed net figure can hide when energy moved in each direction.
Look at billing periods, because excess credit might carry to later months, be paid out under a rule or expire, and the answer affects payback. Distinguish kilowatt from kilowatt-hour, since kilowatts measure capacity at a point in time while kilowatt-hours measure energy produced or used over a period.
Self-consumption has value too, because electricity used on site can reduce purchases even if export receives little or no credit, so model both flows. Match generation to demand as well, since a school closed on weekends may export more than a business with daytime operations.
Check time-of-use rates, because electricity imported during a peak period may cost more than electricity exported during a low-value period, so unit-for-unit energy accounting can misstate savings. Check non-energy charges as well, since connection, demand, network or minimum fees may remain even when net energy use is low.
Plan maintenance and check panel orientation and shading, because inverter repair, cleaning and site-specific output estimates mean savings projections should not assume perfect performance forever, and an optimistic generation forecast makes a scheme look better than it is. Consider financing and alternatives: loan payments, lease terms and ownership of any renewable certificates may change the economic benefit, some jurisdictions use net billing or a feed-in tariff instead of conventional net metering, and a bill credit is not a cash payment because it may be usable only against future electricity charges.
Review policy changes, since rules for new installations can differ from those grandfathered under an earlier programme, and a US EPA guide describes interconnection and net-metering policy design while an IEA Photovoltaic Power Systems report examines net metering and self-consumption approaches across emerging markets. For an owner, the decision is whether generation saves enough under the exact local tariff to justify installation and running costs, as electricity export alone does not determine the return.
In practice
Real-world examples.
Example
A building imports 30,000 kWh and exports 8,000 kWh, leaving 22,000 kWh of net imports in a simple energy calculation.
Example
A school exports solar power on weekends and uses eligible credits against later bills.
Example
A business discovers that fixed network fees remain payable despite a low net-energy balance.
Formula
Calculation
Net imported energy = grid imports - qualifying grid exports. With 30,000 kWh imported and 8,000 kWh exported, the simple balance is 30,000 - 8,000 = 22,000 kWh. The bill is not necessarily 22,000 multiplied by one price; export credits and fees follow the tariff.
Worked example with assumed rates. Imports cost $0.15 per kWh, so 30,000 kWh costs $4,500. If exports are credited at $0.08 per kWh, 8,000 kWh earns $640, and the energy bill is $4,500 - $640 = $3,860. A full retail offset of 22,000 x $0.15 = $3,300 would have understated the bill by $560.Case study
Seen in the real world.
Fictional case: Crescent School generated surplus solar electricity on quiet weekends. It initially modelled every exported unit at its full weekday purchase price. After reading its utility's export tariff and fixed charges, it revised its savings estimate and resized the installation.
This fictional case shows why energy balance and bill savings are not identical. The revised model also compared a smaller system sized to weekday use with the larger original design. The smaller system gave up some export but avoided panels whose output the tariff barely rewarded, and the school chose it on payback, not on headline capacity.
Watch out
Common mistakes.
- Assuming net metering rules and credit rates are the same everywhere.
- Ignoring fixed charges and time-of-use pricing in a savings calculation.
- Exporting before checking interconnection and meter approval.
Questions
People also ask.
Does every exported kWh erase an imported kWh at the same price?
Not always. The local billing rule determines the credit and remaining charges.
Does net metering require solar?
Solar is common, but some local schemes allow other generation technologies.
Is net metering the same as selling all output?
No. A buy-all, sell-all tariff can measure and pay for generation separately.
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