THREE IMPORTANT THINGS TO CHECK BEFORE COMMITTING TO A NET METERING PROGRAM

If you're a solar consultant or a homeowner looking for solar panels, you likely already know a lot about net metering.

If not, you'll certainly find it useful.

Simply put, net metering is how your solar panels can send to the power grid any excess energy generated during the day, in exchange for credits from your utility.

You can then use these credits during the night, when your panels generate less energy, which significantly reduces what you'll pay on your power bill.

Therefore, it's easy to see why so many homeowners are so keen on having net metering for their solar panels. On top of that, it also benefits utility companies, since the energy sent from residential panels reduces pressure on the power grid during peak consumption hours.

This makes it so that, by now, most states and utility companies offer some kind of net metering program for homeowners.

Having said this, when applying for a net metering program, there are several key factors that homeowners should check beforehand. Here are three we consider to be particularly important:

1. Check if your credits have an expiry date

As of today, many net metering programs allow homeowners to accumulate credits indefinitely, without any expiry date.

Some, however, don't (and usually expire at the end of a year or two).

This means that it's important to verify this beforehand so that you don't get unpleasantly surprised, and so that you can plan accordingly.

Your utility company should inform you whether their credits expire before you sign a net metering agreement, and should provide you with all relevant information in detail to help you make a decision.

2. Check if your utility applies Time of Use rates

In a nutshell, if your utility applies Time of Use rates to your home, it means that the price of electricity changes according to the hour of the day when you're using it.

Typically, peak hours (when electricity prices are highest) go from around 4 to 9 PM, which is when people usually get home from work and start turning things on around the house. All other hours are considered "non-peak hours", and will have lower electricity prices.

This means that, under Time of Use rates, the energy solar panels produce during peak hours will accumulate more credits for you, and vice versa during non-peak hours. This can very likely make investing in solar panels all the more worthwhile.

Aside from having the responsibility of informing you of Time of Use rates beforehand, solar consultants and utility companies can oftentimes run simulations for you, thereby allowing you to see exactly how much they will affect your power bill at the end of the month and year.