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Definition
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Net metering is a utility billing arrangement that credits solar panel owners for excess electricity their system exports to the power grid. When your panels produce more power than you consume — typically during midday peak sun hours — the surplus flows to the grid and your meter effectively runs backward, crediting your account. In most traditional net metering programs (NEM 1.0/2.0), credits are valued at the full retail electricity rate, maximizing your solar savings. California's NEM 3.0 (effective 2023 for new installations) reduced export credits to approximately $0.04–0.06/kWh — lengthening payback periods and shifting the economics toward battery storage pairing.
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net energy metering
bidirectional metering
solar net billing
Used in Context
- Under Florida's net metering policy, FPL credits excess solar production at the full retail rate — meaning each kWh exported offsets the same cost as a kWh consumed, giving Florida solar owners one of the strongest net metering programs in the country.
- California's shift to NEM 3.0 reduced export credits by roughly 75%, prompting solar installers to pair almost all new residential systems with Powerwall or Enphase battery storage to maximize self-consumption rather than export.
- Texas's ERCOT market doesn't mandate statewide net metering — compensation for exported solar power varies by retail electricity provider (REP) and can range from $0 to near-retail rates.
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