Quick Summary
Net Energy Metering (NEM) is a utility billing structure that allows homeowners to export excess daytime solar electricity to the utility grid in exchange for billing credits. These credits offset the cost of electricity drawn from the grid at night.
NEM is a critical driver of solar ROI. In states with 1-to-1 net metering, you receive a full credit for every kilowatt-hour exported, essentially using the grid as a free battery storage system.
Typical Net Metering Options
- NEM 1.0 / 2.0 (Full Retail Credit): High-value 1-to-1 credits. Perfect for grid-tied solar systems.
- NEM 3.0 (Avoided Cost/Time of Use): Reduced export rates (slashed by 75%). Requires battery storage to make solar viable.
Frequently Asked Questions
Do I still get an electricity bill with solar?
Yes. Even if your production offsets your usage, you will receive a bill for connection fees (typically $10 to $15 per month).