#netenergymetering

[solaroot]

Maximize Your savings with NEM 3.0 - Learn Net Energy Metering to reduce energy costs, boost efficiency, and make the most of solar power to

[westcoastsolarsystems-blog]

How Solar Works

So because of my job I speak with a lot of people about solar. I speak with people where I am the first solar guy and I speak with people who have met with many companies about solar. I am surprised by how much confusion and misinformation there is, especially when the person I am speaking with has already talked to multiple companies. To me it means that the salesmen are either deliberately trying to misinform, or just not explaining to take advantage of people’s ignorance. So this is my definitive guide to how solar works. 

Solar is really not as complicated as many sales guys try to make it sound. There really are not that many “moving parts” as the saying goes. So here is the breakdown of the whole process. A solar system is made up of two main components, the panels and the inverter(s).  So let’s say you have system installed at your home.  The process is complete, the city/county has signed off on it, and your power company has given you the go ahead to have your system up and running, so you flip that switch and you are producing your own power.  

A few things happen at that point.  Your power company switches you to Net Energy Metering, or NEM.  This changes the way they bill you. Instead of getting a bill every month, they will send you a monthly statement, it will show how much power you used from them, how much extra power you generated, and it will show your balance and basic minimum charges.  Nothing will be due at that point because NEM is set up as a yearly billing cycle.  On the anniversary of your date of interconnection (the day your system is turned on according to your power company,) you will receive a true-up statement. This is basically a reconciliation of all credits and charges you have throughout the last year.

So you may be asking, why do I even have a bill at all, I thought I went solar, why do I need the power company at all? Let me explain, a solar system is designed to cover a certain percentage of your electricity usage.  For simplicity let’s just assume the system is designed to cover 100% of your electricity needs. So a solar guy gets your historical usage, usually at least 12 months, and designs the system to produce that much power over the next year.

The system is installed and turned on. The sun comes up, the sunlight hits the panels which causes a chemical reaction which releases electrons, creating an electric current. This electricity travels to your inverter, which converts the power from DC (what batteries typically use) to AC (which everything in your home uses) and that electricity goes to your electric panel and powers your home.

If there is any extra electricity, that electricity has to go somewhere. Battery technology, while available, is still in the “too expensive to be practical” phase, so that’s where NEM comes in. Your NEM agreement with the power company allows you to send that extra electricity back into the grid. This spins your meter backwards and goes out for your neighbors to use and the electric company keeps track of all this and gives you credits for it.

Now all day this is happening, but once the sun sets, your system shuts down because there is no electricity being produced, and you start pulling your electricity from the grid again. This all happens automatically, without you having to do anything.  At the end of the first month you will get your first NEM statement. It will show how much power in kilowatt hours (kWh) you used from the grid, and how much power in kWh you sent out to the grid.  Then it will show a balance of credits and charges, plus your minimum monthly charge ($4-$10 depending on your power company) along with what you would owe if it was the true-up month.  

Let’s say that your system was turned on in January.  So your first statement shows you probably didn’t use much power, but your system did not send that much extra in to the grid either. In winter months, when there are more rainy days, and less hours of sunshine, your system will produce less power.  As the days get longer, you will notice your system produces more power.  So generally speaking your months in spring and fall will have the most credits, because usage is typically lower than summer, but the days have more sunshine than winter. And the summer and winter months will have more charges than credits because while the winter usage will be low, so will production; and in summer, production will be high, but so will your usage.

So jump forward a year to your true-up statement. We said earlier that your system was designed to cover 100% of your historical usage. So when you get the statement it will show the total of all the kWh’s you used from the grid, and the total of the credits you earned by sending kWh’s back into the grid.  It will then take all those credits and wipe out as much of your charges as it can. Since we offset you 100%, the credits should wipe out all of your charges. That is of course based on you using the same amount of electricity you used in the previous year.  If you used less power, you would end up with extra credits, if you used more power, you would end up with charges.  

Solar does not create an endless supply of electricity, it is only going to create the amount of power it was designed to cover. So going solar does not mean you can suddenly turn all the lights on in your home and run your air conditioner at 50 degrees all summer.  I mean, you can if you want, but your system will only cover the amount of power you used in the past.  So you will end up with a bill for the extra power you use from your power company. So when you go solar, if you are not living comfortably but you would like to, make sure you get a system that will produce more power than your historical usage so you can run your air conditioner more.  A good solar company will be able to do this for you easily.

I know that this was kind of long winded, but if you made it through to the end you probably know more about solar than most of the solar sales guys who knock on your door or attack you in the home improvement stores.

If you have any specific questions or would like me to design you a system, I am always ready to help. You can reach me by phone or email; 559-869-8830 and [email protected]

 Best Regards,