- Last Updated: March 7, 2012
One benefit of a residential solar power system is the ability to offset your electric costs by selling excess power back to your local utility company.
Home solar electric systems produce power continuously during the hours of direct sunlight. Frequently, the power produced during these hours is more than the power consumed by the home during the same time period.
Electricity is volatile: you must use it immediately or store it in a battery or it is lost forever. Systems equipped with batteries have maintenance costs and disposal issues. In addition, storing electricity in batteries results in some loss, since batteries are not 100% efficient.
Selling the excess power to your utility can be a favorable alternative to storage, depending on how much your utility pays for the electricity it buys. Your state laws will determine the rate your utility must pay and not all states allow it. Usually, your utility will not be required to pay as much as a consumer pays for electricity.
When your residential solar power system is configured to sell power to the electric company, a two-way meter is installed to measure the amount of current flowing from your residential solar system back to the utility’s electric grid. The term “electric grid” refers to the wires and infrastructure used to generate and deliver power from a utility company.
The practice of selling power to your utility company is known as net metering. The term “net metering” is used because the amount sold is the difference, or net, between the metered usage of the home and the metered current flowing back into the grid.
There are strict codes that apply when you connect your residential power systems to the utility’s electric grid. A professional solar power installer from your area can design and install your system so it is in compliance with local codes, ensuring that you are eligible for net metering.