What Is Net Metering, How Does It Work, And How Does It Benefit A Homeowner?

2 March 2022 Posted by Peter Almeida Solar Knowledge

Solar Net Metering is a program that allows residential and commercial owners in Florida to receive a full, fair retail credit for the excess energy their solar power systems produce throughout the year. These credits help solar owners offset the costs of installing solar, and if the state has the advantage of net metering, it allows you to send your extra power to the grid and provide credit that you can use when you need it. Net metering ensures the energy you generate at home doesn’t go to waste.


Traditional meters for homes that do not have solar panels run forward for the energy that is being consumed day and night, and therefore are billed at the end of the cycle for that energy consumption. However, when a homeowner installs a solar panel system on their roof, this traditional meter is switched out for a bi-directional meter, which allows energy to be sent back to the grid. So, when a solar panel system is producing more electricity than what is being used at any point during the day, that excess electricity is sent back to the grid, running the electric meter backward, and giving the homeowner a credit. This means that, at night, or at times when the home is consuming more energy than it is producing, the electricity will be pulled from the grid. With net metering, at the end of the year, the utility company will compensate the homeowner for any energy credits not used over the year. 



1- Reduce Electricity Bills

Net metering provides homeowners thousands of dollars in savings over the lifetime of their solar panel system by getting credit for the excess electricity they generate.

2- Protect the Electric Grid

Net metering serves as a way for homeowners and businesses to contribute clean energy and remove some of the pressure from the grid. This is especially true during peak consumption periods, such as mornings and evenings.

3- Reduce Your Payback Period

Net metering programs make the prospect of investing in a solar panel system much more attractive to homeowners because it can dramatically reduce monthly bills. As a result, homeowners who take advantage of a net metering program should be able to recoup the initial solar panel investment much earlier than those who do not.


Net metering guidelines in Florida are pretty standard compared to other US states. Net metering is available to consumers who generate electricity using solar, wind, geothermal, biomass, and more.

Florida allows the connection of renewable energy systems up to 2 megawatts (MW) to your state’s NEM infrastructure. Florida utility customers who own net-meter renewable energy plants have the opportunity to receive a credit for each kilowatt (kW) of energy their plant generates. If you produced more energy than you used during the month, the credit will be saved for the next monthly bill or any future bills where you did not produce more energy than you used.

If you produced more energy than you used during the month, the credit will be saved for the next monthly bill or any future bills where you did not produce more energy than you used. Every 12 months, the solar customer is compensated for any additional credits that were not redeemed during the year. The utility company pays the customer a fee based on a flat rate per kWh of excess energy. This rate is less than what the customer would spend for the same amount of electricity, so it makes sense to use the credits instead of charging them at the end of the year.

Net metering policies may be different from state to state, so it is important to research what each state has enacted and what the local utility companies can provide for you. 

Take a look to see if your state is currently offering net metering here.