Investing in solar power panels for your home and business has never been a better choice. Recent developments in the solar industry make purchasing and installing solar arrays less expensive than ever before. Emerging battery technology promises that energy storage for true long-term reliability is just around the corner, and the process of “net metering” can actually pay you to provide electric energy for your neighbors and community.
How net metering works
Electricity from any source has unique properties that do not allow it to be easily stored (although advances in battery technology are reducing this factor). Instead, electricity must be generated and delivered the moment it is needed. The constant demand for electricity keeps the utility grids running all the time.
In the U.S., most solar powered systems use a combination of both solar and grid-supplied electricity — a “grid-tied” solar power system. A grid-tied solar power system has an array of panels that are connected to an inverter. The inverter converts the solar-created “direct current” (DC) to an “alternating current” (AC), which is required by today’s appliances. That power is then sent to the appliances through a meter, which registers the amount of electricity being consumed by the household.
The meter is connected to both the solar array and the grid. When solar power is being used, there is no draw on grid power. When solar power is not available, the meter measures the electricity used from the grid and bills the homeowner for that energy. When more solar energy is generated than is used, the meter will reverse and send that excess electricity back into the grid. The value of that power is then credited back to your utility account. As the homeowner, you pay for the value of grid power minus the value of solar power, or “net metering.”
Net metering is the law
Over the past 30 years, air pollution caused by burning fossil fuels has become a significant factor in the development of America’s environmental policies. Fossil fuels — petroleum, natural gas, coal, etc. — provide the vast majority of the energy that powers our transportation, industries and communities. Harmful by-products from the processing and consumption of fossil fuels are released into the atmosphere, where they cause changes in the structure and composition of the air we breathe. In 2005, the Environmental Protection Agency (EPA) issued rules that encouraged the development of alternative fuels to reduce the negative impact of our energy consumption on the atmosphere.
At the state level, additional legislation was required to embed the federal policy into state laws. Each state was able to devise its own policies to implement the federal mandate. The states introduced a variety of methods to implement alternative energy sources at the local level. One process created as an incentive for alternative energies adoption is the practice of “net metering.” A total of 43 states adopted policies that required their utility companies to explore and implement net metering.
The purpose of net metering as a policy is to accelerate the development and implementation of a cleaner energy supply. It compensates consumers for sharing the excess electricity they produce with their alternative energy generators, such as solar energy panels.
Centralized generation versus distributed generation:
Solar powered electricity (and any other form of off-grid energy production) represents a significant change in the way we think about “utilities.” Standardized utility systems only came about in the late 19th century, as demand for Thomas Edison’s electric light grew exponentially. The electricity grid was developed to provide the power required to light the country.
That grid is a “centralized power generation” system, whereby one source provides the energy resource for an entire community. Solar (and other alternative) energy generation is known as “distributed generation.” Distributed generation systems are small-scale, on-site power sources located throughout the community. The practice of net metering rewards the choice to access energy through a distributed generator, rather than relying on the centralized source.
Processes for net metering differ by state and utility company
Because each state manages its utilities by its own standards, they manage distributed energy generators within their systems differently as well. These differences in legislation and implementation policies mean the benefits of net metering can vary widely from state to state.
For example, some utilities are allowed to require two meters for each solar powered system, one for the solar power, and the other for grid-accessed energy. The rate of compensation for electricity buy-back is state-based as well. Some utilities are required to compensate solar power owners at the retail rate that their customers pay them for grid energy. Other states allow their utilities to pay back only the wholesale value of the electricity.
Clean, reliable solar powered energy gives you the opportunity to reduce your impact on the environment; net metering gives you the opportunity to reduce your neighbors’ impact, too.
RGS Energy, founded in 1978, was the first solar energy system provider and installer in the United States, and it’s still the market leader. To learn how solar can reduce your environmental impact and to get a free quote, visit www.RGSEnergy.com.