Net Metering is a very important Electricity Policy for the promotion of Distributed Electricity Production from Renewable Energy Sources especially Solar Energy.All consumer establishments connected to the power grid have an electricity meter installed which measure the amount of power consumed during a month in Kilowatt Hours (KwH) which is known as one unit.The power utility compiles the data for power consumption during 1 month and sends a bill which is usually the number of KwH multiplied by the retail electricity rate which can vary widely from 10c/KwH to around 35c/KwH depending on the geography.

Net Metering Definition

Net metering is a special metering and billing agreement between utilities and their customers,which facilitates the connection of small, renewable energy-generating systems to the power grid.

What is Net Metering and Difference with Feed in Tariffs

Electiricty Meters can run both ways meaning that if a consumer generate electricity he can reduce the measurement if he sends electricity to the power grid.This way he can reduce the electricity bill by generating electricity from renewable sources on his own.Most US states  except 4 allow net metering which is running the electricity meter backwards for sending the surplus electricity to the grid.Not this has many rules such as allowing the maximum power capacity etc.However Net Metering is not the same as Feed in Tariff which is how governments promote solar,wind and biomass energy.In this a separate meter is installed which measures the total amount of electricity generated through renewable sources and not only the surplus which is transmitted to the power grid.This gives a higher payment and incentive to the solar energy producer.Some Australian states only allow net metering which has been criticized as “fake net metering”

Importance of Solar Net Metering

For Solar Energy,Net Metering is also very important as solar energy unlike other forms of renewable energy is produced a lot in residential and commercial segments.Net Metering concepts is very well developed in countries like Germany which has the best solar incentive in the world.With the price of solar energy fast approaching retail price in many parts of the world,Net Metering will become more important.Generally a contract is signed between the utility and the customer on net metering which allows a consumer to reduce his electricity bill through net metering.

Net Metering and Time of Use (TOU)

The Net Metering law has been expanded to allow “time of use” agreements that place a higher dollar value on electricity during peak times of high demand, such as on weekdays from noon to 6 p.m. during summer months. If  excess generation occurs during peak hours, and electricity use occurs mostly during off-peak or partial off-peak hours,then money can be made through a “win-win” situation

You can see all the Net Metering Policies in the US States in the DSIRE database through this link http://www.dsireusa.org/incentives/allsummaries.cfm?SearchType=Net&&re=1&ee=1