Net Energy Metering is probably the most challenging aspect of solar for people to understand. Without it, solar would be like a gas vehicle with only a 1.5 gallon tank.
With an adequate rooftop, solar will produce enough energy to power your home while the Sun is out, but at night the system is dormant so you would need to pull energy from the power grid. To offset the costs of the energy you pull from the grid, a good solar install would send extra energy into the power grid during the day and you would receive credits for that energy. NEM offers you a credit rate for that energy. True NEM is an offering of retail rate for your energy credits. For example, if your energy provider sells energy for .15 cents per kwh, they would offer you .15 cents for each kilowatt hour that you send them. Such rates don't exist any longer as power providers have been reducing their "buyback" rates in most markets.
Until battery storage is more affordable and more capable, power providers have leverage in this situation.
One of the more notable Net Energy Metering changes came in California in 2023 with the transition to NEM 3.0 where it significantly changed the NEM process with Edison, PG&E, and SDG&E. To learn more about these changes, click here.
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