Net Metering vs Net Billing: How Export Rules Impact Savings

Export credit value and windows; minimum charges; TOU

How your utility credits excess solar production affects savings:

• Net metering: Excess production credited at full retail rate (1:1). Best for savings, but becoming less common.
• Net billing: Excess production credited at avoided-cost rate (often lower than retail). Reduces savings compared to net metering.
• Export windows: Some utilities limit when you can export or credit value varies by time of day.
• Minimum charges: Some utilities charge minimum monthly fees even if you produce more than you use.
• Time-of-use (TOU): Rates vary by time of day. Export during peak hours may be worth more than off-peak.

Ask your installer how your utility's export policy affects savings. Policies vary by utility and may change over time.

Interconnection basics; metering; main-panel upgrades

Interconnection is the process of connecting your solar system to the utility grid:

• Interconnection application: Your installer typically handles the application, but you may need to sign forms.
• Metering: Utility may install a bidirectional meter or replace your existing meter. Some utilities require smart meters.
• Main-panel upgrades: Older panels may need upgrades to handle solar. This adds cost ($1,000–$3,000+).
• Timeline: Interconnection approval can take weeks to months, depending on utility and system size.

Ask your installer about interconnection timeline and costs. Main-panel upgrades are common for older homes and add to total system cost.

Storage for TOU and export shaping

Batteries can help maximize savings under time-of-use rates and export policies:

• TOU arbitrage: Store solar during off-peak hours, use during peak hours when rates are higher.
• Export shaping: Store excess production instead of exporting at low rates, use stored energy when rates are higher.
• Self-consumption: Use stored solar energy in the evening instead of buying from the grid.

Batteries add cost but can improve savings under TOU rates or low export credits. ROI depends on your utility's rate structure.

For more details, see our guide on solar batteries and backup.

Reading your proposal's production/savings assumptions

When reviewing solar proposals, check these assumptions:

• Production estimate: Annual kWh production based on system size, roof orientation, and shading. Verify assumptions match your roof.
• Export credit value: Assumed credit rate for excess production. Verify this matches your utility's current policy.
• Rate escalation: Assumed annual increase in utility rates (typically 2–4%). Higher escalation improves ROI.
• System degradation: Assumed annual output decline (typically 0.5–1% per year). Lower degradation improves long-term savings.
• Financing terms: If financing, check APR, term, and how payments affect net savings.

Ask installers to explain their assumptions and provide conservative vs. optimistic scenarios. Verify export credit rates with your utility.

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