Difference between Net Metering and Net Billing

Lower electric bills are probably the biggest selling points of installing residential and commercial rooftop or ground mount solar panels systems. But how exactly do these savings add up, and what happens if your green energy generation doesn’t always keep up with your home’s or business’s energy needs?

Utility companies offer Net Metering and Net Billing programs as the primary way to help customers save money while remaining connected to the electric grid, so they can still meet their electricity demands in times when their generation unit falls short.

What Are the Net Metering and Net Billing structures?

Though people often erroneously use the terms “Net Metering” and “Net Billing” interchangeably when talking about green energy, you may be surprised to learn the two phrases are not synonymous. Let’s take a closer look at what these terms mean, and the differences between them.

A Net Metering system meters (or measures) the energy customers generate for themselves via solar panels, wind turbines, etc., each billing cycle. Similar to the concept of “banking” unused data on a cell phone plan, customers send excess electricity back to the utility and accumulate kWh credits when their solar panels generate more energy than home or businesses can use. Customers then get charged based on their Net usage of kWh at the end of each billing cycle.

Net Billing also allows green power users to offset their retail electricity purchases. However, under a Net Billing system, customers can sell any excess energy they generate back to the utility company at pre-determined wholesale prices. Both consumption and generation are recorded and bill separately. As a result, customers get charged their full retail rate per kWh when they use energy from the grid, and are paid a wholesale price by their utility when they sell it back.

Under the Net Billing structure both the consumption and generation are recorded and billed separately – courtesy of sciencedirect.com

Therefore, the primary difference to understand between Net Billing and Net Metering is the rates used to value the excess energy fed into the grid and energy received from the grid. The two concepts are similar, but can result in markedly different costs at the end of each billing cycle.

Saving Money With Green Power

If you are considering the switch to green power, you may be wondering how much you can expect your energy expenses to decrease. With Net Billing and Net Metering, the amount you can save on your energy bills after switching to green power will depend on your utility company and billing structure.

The good news is that most people can expect to realize monthly savings after installing their solar panels, wind turbine, etc., so that the green energy generator will eventually pay for itself.

If you’d like to get more information on solar Net Billing in Alberta, please contact us and fill out a request form to receive FREE quotes for you solar panels installation in Alberta.