Net Metering in the Mid-Atlantic: How It Works
Net metering is a convenient way for owners of solar systems to lower their monthly energy bills while sharing their excess solar energy with the public grid and getting credit for it. In this article, we’ll explore how net metering works, then review specific net metering policies across four Mid-Atlantic states: West Virginia, Maryland, Virginia and Pennsylvania.
How net metering works
On a sunny day, the energy generated by your solar system may exceed your home or business’s energy requirements. With net metering, this excess energy flows into the public energy grid and registers as a credit on your electric meter. The surplus energy pushed to the public grid will be utilized by your neighbors and others on the grid. At night, when your PV system is dormant and you need to draw energy back from the public grid (thus reversing the flow) your meter will reverse its direction to register a debit. By the end of the month, these daily credits and debits will have added up to either a net energy debit that you owe the public utility, or a net energy credit that the public utility owes you. Thus the term net metering.
Net metering and the billing cycle
Although the details of the energy billing process with respect to net metering may differ from state to state, there is a common foundation worth mentioning. During each monthly billing cycle, your public utility will show a debit for the energy that flowed from the public grid into your property (highlighted in red in example bill). Conversely, the bill will show a credit for the energy that flowed from your property into the public grid (highlighted in purple in example bill). If the credit exceeds the debit, then the remainder will carry over (i.e. roll over) to next month’s bill (shown here as Banked KWH Credit). Note that although the cost-of-energy component of your current monthly energy bill may be zero in certain cases, you will generally still need to pay a few minor customer fees associated with the billing process. Nonetheless, the total in such cases will be smaller compared to your former, pre-solar energy bill. Either way, any residual credit that rolls over from month to month will continue to accumulate throughout the annual billing cycle. In some states, such as Maryland, if there is any accumulated credit remaining at the end of the annual billing cycle, the public utility will send you a check for it, according to a specific formula that determines its cash value (the wholesale energy rate). In other states, your credit will continue to roll over from month to month for the life of your contract.
Going Net Zero
Going net-zero refers to having enough solar capacity to generate all the energy you need over the course of a year. During the summer months when days are longer, you will accumulate a surplus credit on your electric bill. During the winter months, when days are shorter, you draw down this credit. The goal is to have zero surplus and zero energy costs after a full year. Most solar energy systems installed today will not necessarily be large enough to zero out the bill simply because of the space required and cost. However, it is entirely possible to do so in any of the four states being discussed.
Net metering by state (Mid-Atlantic)
Let’s look at how net metering works in four Mid-Atlantic states: West Virginia (WV), Maryland (MD), Virginia (VA) and Pennsylvania (PA). Across the board, all four states offer net metering for both commercial and residential properties. However, specific net metering policies do differ from state to state with respect to a few key questions. Let’s look at four of them:
Are all utility companies required to offer net metering?
- WV: Yes
- MD: Yes
- VA: No (only investor-owned utilities and electric co-ops)
- PA: No (only investor-owned utilities)
Note that while Virginia and Pennsylvania do not require all utilities operating in their states to offer net metering, they do place this requirement on investor-owned utilities, which account for a large percentage of overall utility coverage in both states.
Is credit applied to your monthly bill at the full retail rate?
- WV: Yes*
- MD: Yes*
- VA: Yes*
- PA: Yes*
*Although all four states offer full retail value for your solar-generated energy when crediting your monthly energy bill, they do not share all the same state policies governing the process of rolling over your credit from month to month. In West Virginia, any remaining monthly credit continuously rolls over to the following month, without any annual billing cycle cut-off. In Maryland, generally speaking, the monthly roll-overs come to an end with the completion of the annual billing cycle, after which time the customer is paid for any remaining credit at “the commodity energy supply rate.” In Virginia, after each annual billing cycle, the customer has the choice of continuing to roll-over any remaining credit, or receiving a payment at the “avoided-cost rate.” In Pennsylvania, the customer is paid at the end of the annual billing cycle for any remaining credit at the “price-to-compare” rate.
Is there support for aggregate net metering?
- WV: Yes
- MD: Yes (but limited primarily to farmers, non-profits and municipalities)
- Virginia: Yes (but limited primarily to contiguous farms, charges may apply)
- Pennsylvania: Yes
A state that supports aggregate net metering allows property owners to apply net metering to multiple metered structures residing on the same property (all drawing from a single PV system). For example, farmers with several metered structures, but only one PV system, on their farm can nonetheless leverage net metering across all their structures as an aggregate.
Leveraging net metering in the Mid-Atlantic
As outlined above, the primary benefit of net metering is that it transforms your solar system’s excess energy into a valuable credit that reduces your monthly energy bill. If the monthly credit you receive for supplying energy exceeds the debit you incur for receiving energy, then the remaining credit will roll over to the next month. West Virginia, Maryland, Virginia and Pennsylvania all offer retail net metering for both commercial and residential properties. However, it’s well worth taking the time to learn where your state stands with respect to the following policy-dependent aspects of net metering:
- Utilities required to offer net metering.
- Monthly credit roll-overs and annual billing cycle events.
- Retail vs wholesale rates.
- Position on aggregate metering.
By learning both the universal net metering basics and your state’s specific net metering policies, you can position yourself to leverage net metering to its maximum extent. To get started, submit a request now with Mountain View Solar for a FREE, zero pressure consultation. We’ll be happy to answer all of your questions regarding going solar and net metering. It’s never been a better time to plug into the sun!