Net metering

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Net metering (or net energy metering, NEM) is an electricity billing mechanism that allows consumers who generate some or all of their own electricity to use that electricity anytime, instead of when it is generated. This is particularly important with renewable energy sources like wind and solar, which are non-dispatchable (when not coupled to storage). Monthly net metering allows consumers to use solar power generated during the day at night, or wind from a windy day later in the month. Annual net metering rolls over a net kilowatt-hour (kWh) credit to the following month, allowing solar power that was generated in July to be used in December, or wind power from March in August.

Net metering policies can vary significantly by country and by state or province: if net metering is available, if and how long banked credits can be retained, and how much the credits are worth (retail/wholesale). Most net metering laws involve monthly rollover of kWh credits, a small monthly connection fee,^{[note 1]} require a monthly payment of deficits (i.e. normal electric bill), and annual settlement of any residual credit. Net metering uses a single, bi-directional meter and can measure the current flowing in two directions.^[1] Net metering can be implemented solely as an accounting procedure, and requires no special metering, or even any prior arrangement or notification.^[2]

Net metering is an enabling policy designed to foster private investment in renewable energy.

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