Net metering allows residential and commercial energy customers who generate their own electricity from solar power system to feed excess electricity they do not use back into the power grid. Essentially, net metering in Michigan is when the excess energy produced by a solar energy customer’s solar system is placed back into the utility and a customer is then “credited” for this excesses power going back to the utility company.
When systems are properly sized to the home’s energy usage, you can produce enough electricity to match the energy demand for the entire year. However, the amount of electricity your solar panels produce will vary throughout the year. Net metering helps you account for these differences by crediting you for the excess electricity your solar panels produce so you can use it later. Generally, most houses will produce excess electricity in the summer months and will use more electricity from the grid during the winter (think about the winters in Michigan and your energy usage during that time). These power fluctuations are rather predictable over the year. As such, your utility will not send you a monthly check when you produce more than you need. Instead, you will build up “credits” during the summer months so that you can draw from these during the evening and the winter months when you need them. With a correctly sized system, your solar panels energy production can match your power demand over the entire year. To find out how much energy your home uses, click on the link to this solar calculator to learn more.
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So how does this net metering work and how does it affect me?
During the daytime, solar energy production from the solar array on a house hits peak production during the afternoon, a time while many people are not home. Home electricity consumption is typically higher in the mornings and evenings as folks are getting ready for work or school and arriving home in the evening. Net metering helps you account for these peaks and valleys in your day-to-day electricity production and usage.
When your home solar array produces more than your power consumption demands, the excess energy you produce is fed into the utility company’s power grid. When this happens, your usage meter turns backwards – providing you a “credit!” When your system isn’t producing enough electricity, you will draw from the utility company. This “back-and-forth” between your system and the grid ensures that your excess production will still be used, and your shortages will be met. With net metering, the excess electricity your home produces are a “credit” that covers the times when your solar energy system does not produce enough energy.
Over the course of a month, your utility bill will be adjusted based on a credit you will receive according to the number of kilowatt-hours worth of excess power your solar array placed back onto the utility company’s grid. If you produce less electricity than you use in a month, you must buy electricity from your utility company to make up the difference.
Changes to Net Metering
Under proposed new changes in the state of Michigan, utility customers who put surplus electricity from their solar panels back onto the gird may be paid a lower “credit” rate. This means that any excess electricity which turn the meter backward will not be credited back to the customer at the current full amount. However, customers who apply for the net metering before the first rate is approved will be grandfathered in for a period of 10 years. To lock in this existing net metering rate however, a home owner needs to apply immediately, as the Michigan public service commission may approve this new rate anytime between now and May 2019. Harvest Energy Solutions can help you understand how to ensure that you and your family can be grandfathered in at the current net metering rate.
