Digital illustration of an electricity meter on a blue background.

Net metering: The open secret of lower utility bills

Written by Charles Gale on October 20, 2023. Posted in Energy.

Imagine a future in which your local utility cuts your bill in half for the electricity you generate at home.

That future, as they say, is now. It’s called net metering, and you deserve to know about it.

What is it, exactly?

Net metering, also known as net energy metering or NEM, is an electric billing system that uses the power grid to “store” excess energy produced by your home solar panel system.

Under net metering, the juice your system produces that you don’t use is credited back to you by your utility.

At night, or on rainy or cloudy days, or maybe during a Saturn return (I’m not 100% sure about that one) when your solar panels can’t generate enough energy, the utility grid will feed energy to your home.

They’ll then count that energy against the credits you’ve banked over time. That means they’ll only bill you—a smarty-pants solar customer—for your “net” energy usage.

With a carefully designed home solar system, you can generate enough electricity to match your home’s electricity use for the whole year.

But the level of electricity your solar panels produce varies throughout the year: more in summer months, and less in the winter when the sun is lower in the sky and sets earlier and your cousin gets Seasonal Affective Disorder.

With net metering, you can manage these ups and downs by withdrawing the energy you banked when you need it most.

Where did it come from?

Net metering policies were designed to meet two goals: first, to encourage widespread adoption of renewable energy. Second, because utilities–and the power grid as a whole–can benefit, too.

The influx of low- to no-cost solar energy onto the grid helps balance their cost of buying power from other resources, particularly during peak summer months when electricity is at its highest price and you’re rethinking that move to Phoenix.

Wait, do they cut me a check?

Honestly, probably not.

In most cases, your utility won’t be handing you cash for your extra power. But the money you save on lower bills can definitely help you more quickly offset that solar system investment.

In some states, if you generate more electricity than you use in a year, utilities allow you to carry credits over into future years. Others will reduce your credits.

Basically, you want a system large enough to offset as close to 100% of your electricity use as possible, but not a whole lot more.

Is it everywhere?

Net metering policies are mandated by states, and the vast majority offer net metering. As of this writing, a handful (Alabama, South Dakota, and Tennessee) do not. Two other states—Texas and Idaho—have other compensation policies.

But due to the evolving nature of electricity demand and the usual political squabbling, the policies are not set in stone.

If you’re considering net metering as one of the perks of investing in a home solar system, check the status of your local laws. DSIRE (Database of State Incentives for Renewables and Efficiency) keeps an updated list.

What’s the catch?

Some argue that net metering benefits those who can afford solar systems over those who can’t. As more customers take advantage of net metering, utilities shift their fixed costs to non-net-metering customers.

Some utilities might limit the amount of power they credit you for, restrict the number of net metering customers in your area, or not compensate you for the full retail rate of the electricity you produce. Check your state laws and the policies of your utility.

Also, you can’t go completely off-grid and still take advantage of net metering. It’s only for those of us who keep one foot in civilization.

So what’s the bottom line?

With those caveats, net metering is still a better deal than the one you get without a solar system. (We believe in solar so much that we offer more than one choice of system for every Momo Home.)

As solar continues its dizzying rate of expansion (the US generates more than 80 times the amount of solar energy it did a decade ago), states and utilities might pull back on net metering.

But for now, it’s in place, and we thought you should know.

Cheers,

Mike
Mike McAllister is head of story for Momo Homes.

Digital illustration of a home inside a battery with clear walls.

How a home battery can end grid lock-in

Written by Charles Gale on October 17, 2023. Posted in Energy, Home Batteries.

The grid is going down.

That’s the take of Axios, who recently reported that climate change poses an ever-higher threat to the power grid. Massive changes are needed to make the grid more resilient and capable of handling growing demands for electricity.

We’ve already seen this play out in Texas and other states as climate events led to a series of “outs”: brownouts, rolling blackouts, and total blackouts.

Utilities, manufacturers, and homeowners are responding to this new normal with different strategies, including residential solar batteries.

What is a solar battery?

Solar batteries store excess electricity generated by your solar panels. This power goes into the battery’s storage instead of to waste.

You can use this energy at night or during cloudy weather, for starters. But solar batteries also provide power during grid outages. You could even go completely off-grid, trailblazing a path that cuts out energy bills forever.

This could get expensive, however (we’ll get to this) and many homeowners opt for a hybrid solar system that uses a solar battery that connects to the grid.

The pros of grid-connected batteries

These kinds of batteries still pay plenty of dividends. Your friendly local utility company could pay you for that excess energy through net metering.

This is like a billing system that gives you credit for the power you produce that flows back to the grid for the utility and others to use. Net metering can cut your utility bills and help you pay off your solar system investment over time.

Beyond this, solar batteries chock full of clean power can help you reduce your reliance on your utility, avoid their peak charges under time-of-use rates, or provide power during a blackout.

What’s the catch?

They’re not cheap. Solar batteries can cost as much as your solar panels, and the average price is somewhere around $12,000 to $22,000. It’s usually cheaper to buy both the panels and the battery together, however, as one system.

Depending on the size of your home, solar system, and energy needs, you may need more than one battery, and you’ll almost definitely need several more to completely go off-grid.

Solar batteries use different chemical processes to store energy, like lead-acid, lithium-ion, nickel-cadmium and redox flow. Lithium-ion batteries are considered the best option for home use where you need daily charging and discharging, and they last about ten years.

Give me credit

As I continue to research and write here about energy-efficiency solutions for the home, one resource for homeowners comes up again and again.

I’m talking about the 2022 Inflation Reduction Act, the biggest thing Congress has done to address climate impact, basically ever. The bill includes more than $135 billion for clean energy tax credits to ramp up solar and wind power.

We’ve already covered some of the ways homeowners can take advantage of this credit, like with heat pumps, induction stoves, and solar panels.

Solar batteries count, too. The federal tax credit covers 30% of the total cost of your solar system, and solar batteries qualify if they can hold at least 3kWh of energy and are installed in 2023 or later.

Even better, some states offer additional credits and rebates.

Along with covering them in our blog, we’re making these energy-efficient solutions (like a lithium-ion solar battery) available in our homes, too. That means lower bills for you, and less reliance on the aging grid.

Or better yet, get your utility to cut YOU a check for a change.

Cheers,

Mike

Mike McAllister is head of story for Momo Homes.