How Net Metering Works – The Basics
Net metering is a foundational concept behind how residential solar works. This Solar 101 article explains the basics of net metering, why it exists, and how it helps balance solar production and electricity use over time.
For a detailed explanation of how net metering rules are applied in Massachusetts, including utility-specific policies and eligibility limits, see our Massachusetts Net Metering & Utility Rules Guide.
Quick Summary
Net metering allows homeowners with solar panels to receive bill credits when their system produces more electricity than their home is using at that moment. Those credits can then be applied later, when electricity use exceeds solar production.
At a high level, net metering helps solar work even when energy production and energy use don’t happen at the same time.
Why This Matters
Solar panels generate electricity when the sun is shining, but homes use electricity throughout the day and year.
Net metering was created to bridge that gap. Instead of requiring solar production and household usage to match exactly, net metering allows excess solar energy to be tracked as bill credits and applied later. This makes it possible for solar systems to support a home’s electricity needs beyond just daytime hours.
What to Know in Massachusetts
Massachusetts uses a retail-style net metering policy, meaning excess produced electricity sent back to the grid is credited at (or close to) the same retail rate the homeowner pays for electricity.
Key things to understand at a high level:
- Net metering rules are set at the state level and administered by utilities
- Credits are applied to electric bills rather than paid out as cash
- Eligibility limits and administrative details vary by utility
For a full explanation of how net metering works in Massachusetts today, including eligibility thresholds and long-term policy provisions, see our Massachusetts Net Metering & Utility Rules Guide.
How It Works: Step-by-Step
At a basic level, net metering follows this process:
- Your solar panels power your home first
- If your system produces more electricity than your home is using, the excess energy flows to the grid
- Your utility records that exported electricity as bill credits
- Those credits are applied later when your home uses more electricity than it produces
This allows electricity generated during sunny periods to help offset usage at night or during lower-production months.
Helpful Tips & Watchouts
- Utilities issue bill credits, not cash payments, for excess solar energy
- Net metering does not eliminate the need for proper system sizing
- Policies and credit structures vary by state and utility
- Battery storage can reduce how much energy you export, but it does not replace net metering
Understanding these basics helps set expectations before diving into local rules or system design decisions.
Key Takeaways
- Net metering allows excess solar energy to be credited rather than wasted
- Credits help balance electricity production and use over time
- The concept of net metering is similar nationwide, but rules vary by location
- State- and utility-specific details matter and should be reviewed separately
To learn how net metering applies specifically in Massachusetts, including utility rules and eligibility constraints, visit our Massachusetts Net Metering & Utility Rules Guide.
Questions About Solar?
At Valley Solar, we work with homeowners and business owners across Western and Central Massachusetts and regularly explain topics like net metering, utility billing, and system design so people can make informed choices that fit their property and electricity use.
If you still have questions about how net metering works, or how it applies to your situation, our team is happy to help walk through your options.