Net Metering Explained

June 25, 2021 3:16 pm
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Why is a bigger solar array not always better? Because depending on your goals and your utility’s Net Metering policy, a larger system might not be the right fit at all! It is vitally important that your solar contractor is aware of your utility’s net metering policy and that they factor that policy into your savings calculations and system design. Working with a homegrown Wisconsin solar contractor like Arch Electric is a great way to be sure you’re getting a design that fits your needs and situation, now and for years to come.

 

Net Metering is the policy that determines the credit value paid by your utility for solar production, and how that value changes if your solar panels generate greater more energy than you use. Depending on your utility, this determination will be made on a monthly or annual basis.

In other words, when you become a “net producer” you receive a lower rate for the energy you send back to the grid. So if you are in a utility that has monthly net metering, like WE Energies and Alliant Energy, and you use 850kwh in June, while your solar array produces 1250 kWh, you would receive full retail value for the 1st 850 kWh of solar production and a lower rate for the 400 “excess” kWh in that month. Our team will factor that into your savings projection no matter what system size you are interested in.

From a financial perspective, it is usually best to limit your excess production based on your utility’s policy. From an energy independence standpoint, this means that you may have to sacrifice some financial reward to produce all of your electrical needs, or to plan for future energy needs. You may also want to consider plans for electrification of vehicles or appliances and how that will change this equation as well.

 

It’s also important to know that every utility can have different net metering rates and structures. Knowing the differences between them and understanding how they impact the finances of your solar investment can be the difference between an 11-year return on investment and a 16-year return. That’s why it’s always in your best interest to talk with a trusted local installer who knows the ins and out’s of your utility.

 

 

 

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