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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 rule for investor-owned utilities (Fla. Admin. Code R. 25-6.065), FPL credits excess solar production against later bills at the retail rate for up to 12 months, and pays for credits still unused at the end of the calendar year at its lower as-available energy rate.
- 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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