Understanding Net Metering for Commercial Solar
As a business owner, you are always looking for ways to reduce your energy costs and enhance your sustainability efforts. Installing a solar energy system is a great way to achieve both of these goals, but understanding how net metering works is equally important to get the most out of your investment. That is why we’re here to outline everything you need to know about net metering so you can make the most beneficial decision for your business!
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What is net metering?
Net metering is not just for homeowners, but it’s also beneficial for commercial businesses that have installed solar panel systems. The process essentially credits the owners of solar energy systems for the electricity they produce and add to the grid. This means that if a customer has a PV system installed on their premises, which generates more electricity than they consume during daylight hours, they can receive credits for the excess electricity that is added to the grid. These credits can then be used against the electricity that they consume at night or other times when their solar system’s output is less than their energy usage. As a result, customers are billed only for their “net” energy use, which means the energy that they consume after subtracting the credits for the excess electricity they have generated and added to the grid.
How does net metering work?
Net metering for commercial businesses works the same way as it does for residential properties. Net metering is a mechanism that enables solar panel owners to contribute excess energy produced by their panels back to the grid. When a solar panel system produces more electricity than is being consumed, the excess energy is automatically sent back to the grid, which causes the owner’s electric meter to run in reverse. Conversely, when the energy consumption is higher than the energy production, businesses can draw electricity from the grid, causing the meter to run forwards. The difference between the amount of electricity that is drawn from the grid and what is fed back to the grid is known as the “net” amount, which is what the business is billed for.
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Why does net metering exist?
Net metering policies exist for two main reasons: to promote the adoption of renewable energy sources and to benefit the utilities and the electricity grid as a whole. By encouraging the use of solar energy, net metering helps to reduce the country’s reliance on non-renewable energy sources and decrease the carbon footprint. The more people use solar energy, the less strain on traditional power sources, and the fewer emissions will be released into the environment.
Additionally, utilities and the electricity grid can benefit from the influx of solar energy onto the grid. Solar energy helps to balance the cost of purchasing electricity from other resources, especially during peak demand times like summer months. This is because solar energy is most abundant during the hottest and sunniest days of the year, which coincides with high electricity demand. Net metering allows utilities to credit solar panel owners for the excess energy they produce, and that energy can then be used to power nearby businesses, reducing the need to purchase additional energy from traditional sources.
How do electricity bills work with net metering?
Commercial businesses with solar panel systems will receive a monthly bill that shows their net electricity usage. This bill will account for the energy consumed from the grid, as well as the energy sent back to the grid. If the business generates more electricity than it consumes, it will receive a credit for the excess energy. On the other hand, if the business consumes more energy than it generates, it will need to purchase additional electricity from the utility company. Overall, net metering is a great way for commercial businesses to save money on their electricity bills.
Advantages of Net Metering
Commercial businesses benefit greatly from net metering programs when they install solar panel systems on their properties. Here are some of the advantages of net metering for commercial solar:
Utility Bill Savings
One of the primary advantages of net metering for commercial solar is the significant savings on utility bills. In fact, net metering can result in tens of thousands of dollars in savings over the lifetime of a solar panel system. With the right design, a solar power system can offset all of a business’s energy costs within a billing cycle, resulting in substantial savings. However, it’s important to note that net metering can’t eliminate all fixed charges on utility bills.
Shorter Payback Periods
Areas that offer full retail net metering programs will have much shorter payback periods than those that don’t. This is because commercial businesses will be saving more on their electricity bills, and thus recouping their investment costs faster. It’s important to note that net metering isn’t the only factor that impacts a solar payback period. Factors like the size of the photovoltaic system, the amount of electricity used, the cost of installation, and the solar incentives and rebates in the area will all play a role in determining the length of time it takes to pay back the solar panels.
Reduces Pressure on the Grid
Net metering programs also provide a benefit to utilities and their customers by reducing stress on the electric grid distribution system. With solar businesses producing their own electricity and relying less on the grid, there are fewer people drawing power from the grid directly. When a solar system sends excess energy to the grid, that electricity is used by other non-solar utility customers, which takes even more pressure off of utility power plants. This is particularly important in areas like Florida, where heat waves are common and utilities struggle to meet energy demands.
Should net metering be important to me?
With net metering, you receive the full value of the solar electricity that your solar energy system generates. The amount of electricity produced by commercial buildings may not always be the same as the amount of power consumed. For instance, solar panels tend to produce more energy during the day when the sun is shining, while businesses may use more electricity during the night.
Without net metering, the extra electricity generated by the solar panels may not be fully credited to the business owner. In such cases, the excess electricity is sent to the grid, but without net metering, the grid may not be able to credit the business owner for that extra energy. However, with net metering, the produced electricity is fully credited to the business or homeowner.
Net metering is essential for businesses looking to cut their energy costs. With the full credit for the solar energy produced, you can reduce your monthly electricity bills and save thousands of dollars over the lifetime of your solar panel system. Additionally, areas that offer full retail net metering will have much shorter payback periods than those that don’t. This means that businesses can recoup their investment costs faster and enjoy greater long-term savings.
Start Saving with SEM Power!
From utility bill savings to reducing stress on the electric grid, net metering provides numerous advantages that can help your business save money and be more environmentally friendly. If you’re interested in installing a solar energy system for your business, contact SEM Power. Our experienced team of professionals will work with you to design and install a customized solar solution that meets your unique energy needs. With our expertise, you can start enjoying the benefits of net metering and take advantage of all the advantages that solar energy has to offer. Give us a call today!
Questions About Net Metering
Why does net metering exist?
Net metering exists to incentivize the adoption of solar energy by allowing customers with solar panels to receive credits on their utility bill for excess electricity they generate and feed back into the grid. This benefits both the customers and utility companies by reducing energy costs, promoting renewable energy, and reducing greenhouse gas emissions.
Is net metering available in all states and cities?
Net metering policies vary by state and are implemented by individual utility companies. Some states have strong net metering policies that provide a favorable environment for solar energy adoption, while other states have limited or no net metering policies.
Do net metering credits carry over from month to month in Florida?
Yes, in Florida, net metering credits can carry over from month to month. The excess electricity that a customer generates is credited to their account at the retail rate and can be used to offset their future electricity consumption.
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