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What is net metering?

Net metering, also called net energy metering, credits a home’s exported electricity against electricity taken from the utility grid. Credits can apply within a billing cycle or carry into future cycles. Before sizing rooftop solar, confirm eligibility and credit rules with your utility; monthly administrative or standby fees may still apply.

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By InstaBids editorial team with AI research agents. Updated

What this means for your home project

  1. Ask your utility whether the proposed solar system qualifies under its current net-metering policies; obtain an eligibility answer before choosing the system. Source: U.S. Department of Energy, read 2026-11-02.
  2. Request a written solar proposal that identifies the system size, customer type, rate and bill-credit design used in its assumptions; compare those fields with utility information. Source: U.S. Department of Energy, read 2026-11-02.
  3. Request an itemized list of possible application, grid-connection, inspection and meter fees so these items appear separately in the written project scope. Source: National Laboratory of the Rockies, read 2026-11-02.
  4. Ask the solar installer whether battery storage is offered; have the response identify the storage options for your proposed installation. Source: U.S. Department of Energy, read 2026-11-02.
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How does net metering work?

Net metering can bank an exported-energy credit for the current or a later billing cycle. The National Laboratory of the Rockies distinguishes this from net billing, which typically does not bank kilowatt-hours within a billing cycle to offset later consumption. “The credit can be applied to offset consumption of electricity within the current billing cycle (e.g., 1 month) or future billing cycles.” Source: National Laboratory of the Rockies, read 2026-11-02. “Unlike net energy metering, banking of kilowatt-hours within a billing cycle to offset future consumption is not typically allowed with net billing.” Source: National Laboratory of the Rockies, read 2026-11-02.

Under net metering, are all utility charges subject to the credit?

Do not assume an exported-energy credit cancels every charge. For distributed generation (DG), national laboratory guidance identifies monthly administrative or standby fees and possible one-time application, grid-connection, inspection or meter fees; request the applicable charges alongside the credit calculation. “For instance, many utilities charge DG owners monthly non-bypassable administrative or standby fees that may reduce the overall cost savings for the DG owner and extend the investment recovery period.” Source: National Laboratory of the Rockies, read 2026-11-02. “Many utilities also charge a one-time application, interconnection, inspection, and/or meter fee.” Source: National Laboratory of the Rockies, read 2026-11-02.

What equipment do I need for net metering?

The Illinois Attorney General’s December 2023 brochure describes two generating options: rooftop photovoltaic panels, which capture solar energy, and wind systems made of turbines. Photovoltaic is abbreviated PV. Identify the proposed generating equipment separately from the meter that records electricity. “Solar electric systems generally consist of photovoltaic panels added to a building’s roof that capture the energy produced by the sun.” Source: Illinois Attorney General’s Office, read 2026-11-02. “Wind systems typically consist of individual turbines and vary widely in size.” Source: Illinois Attorney General’s Office, read 2026-11-02.

Do I have to buy a new meter for net metering?

Ask your utility whether the existing meter can record electricity generated on-site. The Illinois Attorney General’s December 2023 brochure describes a single bi-directional meter for residential customers and a replacement when the existing meter cannot record generation; confirm current arrangements with your utility. “Residential customers can use a single, bi-directional meter, which will be provided to them if their current meter cannot record the electricity generated on-site.” Source: Illinois Attorney General’s Office, read 2026-11-02.

What should I know before I install a net metering system?

Confirm the proposed system’s eligibility and the design of bill credits before choosing its size. DOE identifies eligible system size, customer type and rates as questions for the local utility; request those assumptions in the installer’s written solar scope. “Whether or not your solar system qualifies for net metering payments depends on policies and practices in your state and electric utility.” Source: U.S. Department of Energy, read 2026-11-02. “When researching net metering policies and practices in your service area, there are some basic questions to consider, such as availability in your service area, eligible system size and customer type, rates, and design of bill credits.” Source: U.S. Department of Energy, read 2026-11-02.

I have heard a lot about solar plus storage. What is it and do I need it?

Solar plus storage pairs a solar system with energy storage, most often batteries. DOE explains that stored energy can be used later, including after dinner; ask the installer about battery options if shifting the use of generated electricity is part of your project. “Storage refers to energy storage, most often in the form of batteries.” Source: U.S. Department of Energy, read 2026-11-02. “Storage allows you to save that energy and use it later in the day, like when you turn the heat on at night or run the dishwasher after dinner or even when the power goes out.” Source: U.S. Department of Energy, read 2026-11-02.

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