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How net metering actually works
Net metering is the single biggest factor in whether an on-grid solar system makes financial sense. Get it, and your payback period can be years faster than a system with no export credit at all.
The basic mechanism
A grid-tied solar system doesn't stop generating just because your house isn't using all of it in that moment. On a sunny afternoon with nobody home, your panels might produce far more than your fridge and standby devices are drawing. Without net metering, that surplus is simply wasted. With it, your electricity meter runs backward — literally, on older analog meters, or via bidirectional billing on smart meters — and the surplus is exported to the grid in exchange for a credit. At night, when your panels produce nothing, you draw from the grid as normal and that credit offsets the bill. Your utility bill effectively becomes the difference between what you exported and what you imported over the billing period, not a full bill for everything you consumed after dark.
Why "offset percentage" is the number that matters
Offset percentage is how much of your annual electricity usage your solar system is sized to generate. A 100% offset system is sized to produce roughly as much energy over a year as you consume — in a true net metering setup with annual netting, that can mean a near-zero annual bill (usually still subject to minimum grid connection charges). An 80% offset system costs less upfront and still eliminates most of your bill, while a 50% system is a lower-risk way to test solar before committing to a full-size array. This is exactly the slider in the calculator above: dial it down for a smaller, cheaper system, or up toward 100% to maximize bill elimination.
What a credit is actually worth
Not all net metering programs value exported energy the same way. Full retail net metering credits your export at the same rate you'd pay to import — the simplest and most valuable form for the homeowner. Some utilities instead use net billing, valuing exports at a lower wholesale or "avoided cost" rate, which stretches out your payback period even at the same offset percentage. A few programs cap how much you can export relative to your own usage, or roll credits over only within the same billing year rather than indefinitely. Before finalizing a system size, it's worth confirming which of these applies with your specific utility — it changes the real-world number more than almost any other input in this calculator.
On-grid, hybrid, and off-grid — where net metering fits
| System type | Net metering role |
|---|---|
| On-Grid | The grid acts as your "battery" — export when you're producing extra, import when you're not. No backup during outages. |
| Hybrid | Batteries handle short-term storage and outage backup; net metering still applies to any true surplus beyond what the batteries can hold. |
| Off-Grid | No grid connection at all, so net metering doesn't apply — the system must be sized to cover demand entirely on its own, usually with more battery capacity and a larger safety margin. |
Sizing around net metering in the calculator
In the calculator's Bill & Payback tab, your desired grid offset and tariff together determine your required array size, and the payback projection assumes exported energy is credited at your entered tariff rate — the standard, most common form of net metering. If your utility uses a lower export rate, a more conservative estimate is to lower your offset target slightly, or treat the calculator's payback period as an optimistic case and confirm the real number with your installer or utility before committing.