How Net Energy Works for Consumers

Net Energy Metering (NEM) is a simple and intuitive option for consumers to offset their monthly electricity bills by producing their own energy.  It allows customers to send excess energy from an onsite renewable energy system back to the grid, and receive a 1:1 kilowatt-hour credit for that energy.

electric meter

Solar photovoltaics (PV), for example, predictably produce energy during peak hours of the day, supporting the grid when most needed.  If a household is away at work or school for most of this time, however, their daytime energy needs might be minimal. NEM provides a mechanism for consumers to trade in their daily generation to meet their electricity needs at night. Without it, solar would not be a viable financial investment for many consumers.

 IREC’s role

Over the past 10 years, IREC has worked through state regulatory proceedings to improve and expand consumer access to net metering, with a successful track record to show for it. Just since 2007, IREC participated in regulatory proceedings for NEM in 32 states, and in informal initiatives in 12 additional states.

Updates and Trends

NEM has expanded its scope in many states, to allow more customers to take advantage of their onsite and offsite resources.  As allowed by some states, Aggregated Net Metering (ANM), also referred to as Meter Aggregation, allows a single NEM participant to offset onsite electricity load from multiple meters through NEM credits generated from a single renewable energy system.

For example, a farmer could apply solar generation from a barn to offset energy needs for an irrigation system on a separate meter.

In other states, Virtual Net Metering (VNM) has been implemented to allow multiple NEM participants to receive the benefits of a single net-metered renewable energy facility, with the resulting credits allocated across the multiple participants’ bills.  For example, multiple stores in a shopping mall may benefit from a single solar installation on the roof.


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