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J Ferg Knowledge Base

What Is Net Metering?

Net Metering, also known as solar buyback or NEM, is the process of selling excess energy generated by solar panels back to utility companies. With net metering’s ability to generate more monthly savings, this process is another one of the many benefits of switching to solar power.   

How does net metering work? 

Net metering allows you to use your solar energy in the most economical way possible.  Solar panels absorb sunlight and convert it to the energy that is used to power your home; however, the sun does not shine 24 hours a day. What happens at night? Well, your solar panels can store up energy that is used later.    Over time, your solar panels can save up more energy than can be used- especially during sunny seasons and/or in particularly sunny areas. This excess energy is what you can sell back to utility companies. Utility companies typically purchase excess energy at the full retail rate of regular electricity. Rather than receiving cash or a check in the mail, electrical companies will “pay” you by crediting your account. This process essentially creates a discount on your utility bill each month.   If you run out of stored energy and/or your solar panels are not generating enough energy to power your home, most utility companies will supplement your home with regular electrical energy from the grid. You are charged for this energy just like normal.   Whenever it is time to pay your bill, electrical companies will measure how much electricity you contributed to the grid versus how much electricity you took from the grid. They will then charge you based on your net usage- hence the term net metering.   

How consistent are the savings? 

The consistency of your net metering credits depends on two factors: the time of year and your utility company.  The maximum amount of solar power is generated during the long, sunny days of summer. Therefore, the likelihood of generating excess solar power to use for net metering purposes is highest in the summertime. In contrast, generating enough solar power to use for net metering is far less likely during the short, dark days of wintertime.   Your utility company’s individual policies and rates will also impact how much net metering saves you. Generally, utility companies allow credits to carry over from month to month, allowing you to save money year-round rather than exclusively during the summer months. You can learn more about how your utility company approaches net metering by inquiring about their net metering policies and/or “true-up” policies.  

How can J Ferg Solar help? 

At J Ferg Solar, we know that solar panels have a positive impact on everything from the environment to your wallet. We are eager to help spread this technology throughout our community so everyone has the opportunity to make their homes and businesses smarter, cleaner, and more efficient when it comes to energy.   We are so passionate about solar energy and all its benefits that we are offering a limited-time deal to encourage you to switch: the first 12 months of your solar panel expenses are on us!  For more information, contact J Ferg Solar on our website! 

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