Complete Guide
Net Metering Explained
How solar owners are actually compensated for excess power, why the answer varies by utility, and why it changes whether a battery makes financial sense.
"Net metering" gets used loosely to describe any solar compensation policy, but it's actually one of at least two structurally different approaches utilities use — and which one applies to you can change your solar payback period by years.
The two structures, and why they're not interchangeable
Net metering credits excess solar sent to the grid at or near the retail rate you'd otherwise pay — your meter effectively runs backward. Net billing credits that same excess power at a separate, usually lower, export rate tied to wholesale or avoided-cost pricing. Our full comparison covers the mechanics of each and why some states have shifted from one to the other over time.
Why time-of-use rates make this more complicated
If your utility also uses time-of-use pricing — different rates depending on the hour of day — the value of net metering or net billing interacts with when your solar system produces versus when you actually use electricity. Our time-of-use rates guide explains how to check whether your usage pattern benefits from this rate structure at all.
Why this changes whether a battery is worth it
Under net billing, with a lower export rate, storing excess solar power in a battery to self-consume later is often worth more than exporting it at a discounted rate — this is one of the clearest cases where local utility policy directly determines whether an added-cost component (a battery) pays for itself. Our battery storage guide covers the broader economics of standalone and paired battery systems.
Check your state's incentive landscape too
Net metering and net billing policy is often set at the state or utility regulatory level, alongside (and sometimes tied to) state incentive programs. See our state vs. federal incentives guide for how these pieces fit together.
Run the numbers for your specific situation
Our Net Metering Value Estimator calculates what your exported solar power is actually worth under both compensation structures, using your real production and consumption pattern.