Two popular choices that homeowners and businesses often consider are net metering and solar batteries. Both have their unique benefits and can significantly impact your energy bills and efficiency. In this blog, we’ll dive into what net metering and solar batteries are, how they compare, and which might be the best fit for your needs.
What is Net Metering?
Net metering is a billing mechanism that allows you to receive credit for the excess electricity your solar panels generate. Here’s a simplified way to think about it: imagine your solar panels are producing more electricity than you’re using at certain times, like during the day when you’re not home. With net metering, this excess electricity is fed back into the grid, and you earn credits on your electricity bill for the energy you’ve contributed.
How Does It Work?
When your solar system generates more electricity than your home needs, the extra power is sent to the local utility grid. Your utility meter tracks this surplus and essentially "nets" the amount of energy you've used versus what you’ve supplied. During times when your solar panels aren’t producing enough electricity, like at night, you draw power from the grid. The credits you've earned during the day offset the costs of this grid power.
In practical terms, this means you’re only billed for the "net" energy you consume—hence the name "net metering." It’s a win-win scenario where you save on your energy bills and contribute to a cleaner energy grid.
Net Metering Types
Let’s break down the three main types of net metering: Full-retail, Time of Use (TOU), and Avoided Cost.
Full-retail Net Metering
Full-retail net metering is the most straightforward and commonly used type. Under this system, you receive a credit at the same retail rate for every kilowatt-hour (kWh) of electricity your solar panels send back to the grid. In essence, the value of the electricity you generate is equal to the amount you would pay if you had consumed that electricity from the grid.
For example, if your solar panels generate 100 kWh of surplus electricity in a month and the retail rate is $0.10 per kWh, you would earn a credit of $10 on your electricity bill. This type of net metering is advantageous because it maximizes the value of the energy you produce and can lead to significant savings on your energy bills.
Time of Use Net Metering
Time of Use (TOU) net metering differs from full-retail net metering in that the value of your exported electricity varies based on the time of day. Utilities often have different rates for peak and off-peak hours. During peak hours, when electricity demand is high, the rates are usually higher. Conversely, during off-peak hours, the rates are lower.
With TOU net metering, you earn credits based on the time your excess electricity is fed back into the grid. If your solar panels produce energy during peak hours, you’ll receive credits at the higher rate, which can be more valuable. However, during off-peak hours, the credits are worth less. This type of net metering can benefit those who generate a lot of power during high-demand periods but may require careful planning to maximize savings.
Avoided Cost Net Metering
Avoided cost net metering is a bit different from the other two types. Instead of crediting you at the retail rate, this system provides compensation based on the cost the utility avoids by not having to produce or purchase additional electricity. This cost is often lower than the retail rate and reflects the utility’s expenses related to generating or buying power.
For example, if your solar panels generate 100 kWh of surplus electricity and the avoided cost rate is $0.05 per kWh, you would earn a credit of $5. While this may not be as lucrative as full-retail or TOU net metering, it still provides some financial benefit and helps reduce your overall electricity costs.
What is Solar Battery Storage?
Solar battery storage involves using batteries to store the excess electricity generated by your solar panels. This stored energy can be used later when your solar system isn’t producing electricity, such as at night or during cloudy days. Essentially, it allows you to use more of the energy your solar panels generate rather than relying solely on the grid.
How Does It Work?
When your solar panels produce more electricity than your home needs, the surplus energy is stored in a battery rather than being sent back to the grid. This stored energy can then be drawn upon during times when your solar panels aren’t generating enough power. This means you can use the energy you've generated throughout the day even after the sun goes down, providing greater independence from the utility grid.
Costs of Solar Battery Storage
The cost of solar battery storage can vary widely depending on the brand, capacity, and technology. On average, a solar battery system can cost between $5,000 and $10,000 for a residential setup. This price generally includes the battery unit itself and the installation, but it can be higher for larger systems or advanced technologies.
Although the initial investment can be significant, many homeowners find that the benefits of energy independence and potential savings on electricity bills outweigh the costs. As technology advances and becomes more widespread, the costs of solar battery systems are expected to decrease over time.
Net Metering vs. Solar Batteries: Which Saves More?
When deciding between net metering and solar batteries, the right choice for maximizing your savings depends largely on your energy usage patterns and local utility policies.
1. Full-Retail Net Metering
Best For: Homeowners who generate a significant amount of excess solar energy and live in areas where full-retail net metering is available.
Why It Saves Money: Full-retail net metering provides credits at the same rate you pay for electricity. If you produce more electricity than you use, you essentially get a dollar-for-dollar credit on your utility bill. This can lead to substantial savings, especially if your solar panels consistently generate more power than you consume.
Consideration: If you are getting full-retail net metering, you might not need solar batteries since the credits you receive for excess energy can already provide significant savings.
2. Time of Use (TOU) Net Metering
Best For: Homeowners who generate excess energy during peak rate periods or have significant energy use during these times.
Why It Saves Money: TOU net metering offers higher credits for electricity sent to the grid during peak periods when rates are high. If your solar system generates power during these high-rate times, you can earn more credits. This can be particularly beneficial if you use a lot of electricity during peak periods.
Consideration: If you’re in a TOU net metering area, combining this with a solar battery could enhance your savings. You can store energy when the rates are high and use it later, maximizing the value of your generated electricity.
3. Avoided Cost Net Metering
Best For: Homeowners in areas where avoided cost net metering is the only option or where solar energy production is modest.
Why It Saves Money: Avoided cost net metering credits are lower than retail rates, but they still offer some savings by compensating you for the energy you contribute to the grid. This system might not be as financially rewarding as full-retail or TOU net metering.
Consideration: If you have avoided cost net metering, investing in solar batteries might provide better overall savings. By storing and using your own energy, you can reduce your reliance on the grid and make the most of the energy you generate, even if the credit rates are lower.
Summary:
- Full-Retail Net Metering: Best if you want straightforward savings without additional equipment. Significant savings if your system generates excess power consistently.
- TOU Net Metering: Ideal if your energy production aligns with high-rate periods. Consider solar batteries to further optimize savings by using stored energy during expensive times.
- Avoided Cost Net Metering: Suitable if it’s your only option. Solar batteries can enhance savings by reducing grid dependence and using your stored energy more effectively.
Conclusion
Choosing between net metering and solar batteries is an important decision that can significantly impact your energy savings and overall efficiency.
If you’re looking to enhance your solar energy system and maximize savings, our home solar storage batteries are a perfect solution. Designed with advanced technology, our batteries store excess energy efficiently and provide reliable backup power when you need it most. With our solar batteries, you can take full advantage of your solar system’s potential, reduce reliance on the grid, and enjoy greater energy independence.
FAQ
Is battery worth it with net metering?
Whether a battery is worth the investment with net metering depends on your specific circumstances. If you have access to full-retail net metering, you might find that your savings from net metering alone are substantial enough that a battery isn’t necessary. However, if you are on a Time of Use (TOU) net metering plan, a battery can help you store energy during peak periods when rates are high and use it during times when rates are lower, potentially increasing your overall savings. For avoided cost net metering, which typically offers lower credits for excess energy, a battery might provide a better return on investment by allowing you to use more of your own generated energy and reduce reliance on the grid.
What are the cons to net metering?
While net metering offers many benefits, there are some drawbacks:
- Credit Reductions: In some areas, net metering credits may be reduced over time or replaced with less favorable compensation structures.
- Availability: Net metering policies vary by location and utility, and not all regions offer this option.
- Dependence on Grid: With net metering, you remain dependent on the grid for electricity at night or during periods of low solar production, which may not fully address power outages or reliability issues.
Why are utilities against net metering?
Utilities often have concerns about net metering for several reasons:
- Revenue Loss: Utilities may lose revenue from customers who generate their own electricity and reduce their reliance on grid power.
- Cost Shifting: Utilities argue that net metering customers may not fully cover the costs associated with maintaining the grid infrastructure, potentially shifting these costs to non-solar customers.
- System Impact: There are concerns about the impact of high levels of distributed generation on the stability and management of the grid, especially during peak demand periods.
