When your solar panels produce more energy than needed, or if you tend to use less electricity than average, you may benefit from net energy metering (NEM), or net metering.

Net metering is a billing agreement between you and your utility company. when your solar panels produce more electricity than your home needs, that excess power will be sent to the power grid. Your utility will then pay you for that power sent to the grid, usually in the form of energy credits on your utility bill. This credit will be equal to the full retail price of electricity. 

Net metering allows you to build up these credits on your utility bill during the summer months, so that you can use them in the winter to offset your energy use. 

When your solar panels don’t get enough solar power to meet your electricity needs, you can pull energy from the grid. You use the net metering credits you’ve accumulated to help offset your utility bill. You’ll most likely use these net metering credits at night or during the winter.

So not only are you creating your own electricity with your solar energy system, but you are also saving money on electricity you draw from your utility.

To learn more about net metering and other related policies in your state, check out the Database of State Incentives for Renewables & Efficiency (DSIRE).