Net Metering 101: What Happens With Excess Solar Generation?

A grid-tied system optimizes a solar array so that it will produce the most solar power it possibly can, under all circumstances. The system is tied into your home's electric panel, and the first priority for any solar power is to be used by your home's electric loads: fridge, well pump, water or space heating, electronics, etc.
If you produce more solar power than you use (as will be the case for many customers during daytime hours, especially in summer) then your system will feed power out to the grid. This essentially treats the grid like a battery, "feeding" the grid with clean solar energy that reduces the load on the local electricity grid, which saves everyone money. When this happens, your unused solar power becomes bill credits with your utility company which you can use when it's not sunny.
How does it work?
For a net-metered solar powered home, electricity meter will record both energy consumed that flows into the house as well as exported electricity that flows out through the meter into the grid. This measurement is used to calculate a credit against what electricity is consumed at night or other periods when the home's electricity use exceeds the system's output. Customers are only billed for their "net" energy use.
Net metering programs vary from state to state. Generally, they allow exported solar electricity to the grid to appear as either dollar credits or kilowatt hour credits on your monthly electric bill. In a given month, if you produce more solar electricity than you consume, your electric bill will reflect that excess. In most cases when a solar array is designed to offset your entire electric use, solar customers produce more electricity than they will use from spring until fall. In the winter months, when the days are shorter and the sun is lower in the sky, solar customers will use their "banked" credits to offset their winter time electric bills.
Year-Round Benefits
Net metering allows customers to generate their own electricity cleanly and efficiently, and benefit from any unused solar generated energy. During the day, most solar customers produce more electricity than they consume; net metering allows them to export that power to the grid and reduce their future electric bills.
The graph below is an example of SolarEdge Monitoring for a system's production on a great solar day. Your home uses energy from the grid exactly as it does now (in red), when the sun strikes your panels you produce your own power and self-consume it directly (in blue). In the middle part of a day you will typically be producing more power than you need, the excess (in green) automatically flows back into the grid and powers your neighbors homes. You receive credits for every kWh you send into the grid to cover the red and you can bank credits all summer to cover you through the winter!
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