Solar and net metering: why our numbers do not apply to a house with panels

Three ways a utility can treat exported power

• Net metering. The oldest arrangement, still common. The meter runs backwards when you export, and you are billed on the net — imports minus exports — at the retail rate. A kilowatt-hour exported at noon cancels one imported at 8pm, one for one. This is very favourable to the customer and is being phased out in many states because it pays the daytime kilowatt-hour far more than it is worth to the grid.
• Net billing. Imports are charged at the retail rate; exports are credited at a separate, lower rate, often tied to the wholesale price or an "avoided cost" figure set by the regulator. A kilowatt-hour exported at noon might earn 5¢ and one imported at 8pm cost 30¢. The economics then depend heavily on self-consumption and, increasingly, on a battery.
• Solar time-of-use. Many utilities require or steer solar customers onto a time-of-use plan whose peak is in the evening, after the sun is down. The panels earn little during the cheap midday hours and the house pays full price for the evening peak. These plans often look bad on this site — high evening rates — precisely because they are designed for houses whose midday use is free.

Why we do not price them

Our three modelled households have no generation. Run a net-metering tariff through one of them and it pays full price for every kilowatt-hour, earning none of the export credits that make the plan worth choosing. The result is a large number that describes no real customer: a solar customer would pay far less, and a non-solar customer cannot enrol. We saw exactly this happen in an early build — a solar plan sat at the top of one state’s "most expensive" list and a solar-customer rate at the bottom of another’s "cheapest," both fictions. Now those plans carry a notice, keep their schedule and tariff link, and stay out of every ranking.

What to look at instead, if you have panels

• The export rate. It is in the tariff document linked on each rate page, usually in a separate schedule referenced by name. That single number decides more of your bill than the import rate does.
• The peak hours. On a solar time-of-use plan, your imports happen almost entirely in the evening, so the evening rate is your effective rate. The schedule grid on the rate page shows when it starts.
• The fixed and minimum charges. Solar tariffs often carry a higher fixed charge or a minimum monthly bill that exports cannot reduce. On a house that nets to near zero, that charge is most of the bill. Why fixed charges matter more than the rate for small bills.
• Grandfathering. Customers who installed under an older net-metering rule usually keep it for a fixed term, typically twenty years from interconnection. A change in the tariff book may not apply to you yet; the interconnection agreement says when it will.

And if you are thinking about panels

The value of a solar system now depends less on the panels than on the tariff it will be billed under, and that tariff is the one to read before signing. The change from net metering to net billing has, in the states that made it, roughly halved the bill savings of a system without a battery and left those with a battery close to where they were. An installer’s estimate that assumes one-for-one credit in a net-billing state is not an estimate. Ask which export schedule the quote assumes and check it against the one your utility has on file.