Net Metering Explained
What it is
DOE defines net metering as "an arrangement between solar energy system owners and utilities in which the system owners are compensated for any solar power generation that is exported to the electricity grid." The name dates to the 1990s, when meters literally ran backward — DOE notes "it is rarely that simple today."
Why it varies
Eligibility and compensation depend "on policies and practices in your state and electric utility" (DOE). Rules are set by state legislatures, state utility commissions, and utilities, and they change. Your utility and your state public utility commission are the authoritative sources for current terms.
Questions to ask (from DOE)
- Is net metering available in my service area?
- What system size and customer type are eligible?
- What rate am I credited for exports?
- How are bill credits designed (e.g., do they roll over, and when do they expire)?
Things that don't change
The FTC notes you'll still pay your utility's fixed charges. And per the IRS, net metering credits don't reduce the qualified expenses used for tax-credit calculations (relevant only to pre-2026 installations).
How it affects system design
Where exports are credited at less than retail, it can make more sense to size a system to your daytime use or pair it with storage. Ask your installer to show which compensation assumptions their estimate uses.
Sources
- U.S. Department of Energy, "Homeowner's Guide to Solar" — https://www.energy.gov/eere/solar/homeowners-guide-going-solar (accessed Oct 20, 2026)
- FTC Consumer Advice, "Solar Power for Your Home" — https://consumer.ftc.gov/articles/solar-power-your-home (accessed Oct 20, 2026)
- IRS, "FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (OBBB)" — https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb (accessed Oct 20, 2026)
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Last reviewed 2026-10-20.
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