How Does Net Metering Work?

Net metering is a billing mechanism that credits solar array owners for the electricity they add to the grid. For example, if a residential customer has a PV system on the home’s rooftop, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backward to provide a credit against what electricity is consumed at night or other periods when the home’s electricity use exceeds the system’s output. Customers are only billed for their “net” energy use.

Investor-owned utilities (IOU) such as Alliant Energy and Mid-American Energy in Iowa are mandated by the Iowa Utilities Board to offer net metering. Rural Electric Co-Ops and Municipal utilities do not fall under the same IUB mandates so their policies vary from utility to utility.  

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