For a grid-tied system, the utility relationship is where much of the economics lives. Net metering and rate structures determine what your generation is worth on your bill — and both are set locally.
What net metering is
Solar generation peaks in the middle of the day, but a home's consumption often peaks in the morning and evening. Net metering is a billing arrangement — where offered — that credits exported generation against consumption. When the array produces more than the house uses, the surplus flows to the grid and the account is credited; when the house uses more than the array produces, it draws from the grid as usual. The bill settles the difference over the billing period.
Not every utility offers it, and terms differ
Whether net metering exists, how generously exports are credited, and whether credits expire or roll over are all decisions made utility by utility, sometimes under state policy. Some regions credit exports at the retail electricity rate; others at a lower rate; others limit how much may be exported at all. There is no universal arrangement, so the value of a system depends heavily on your utility's current rules.
How rate structures interact
Rate structures shape the picture too:
- Fixed charges: a monthly fee that stays the same regardless of use; it appears on the bill even if consumption is fully offset.
- Time-of-use rates: electricity priced higher in peak hours and lower off-peak; when a system generates and when a house consumes become financially meaningful.
- Tiered rates: the per-unit price rises with consumption; solar offsets the most expensive tier first in many designs.
Read your own utility's documents
The authoritative answer to any net metering or rate question is your utility's published tariff and interconnection documents, ideally reviewed with a local professional. Insolatio explains the concepts; your utility sets the numbers.