Solar power has been around for quite a while now. In fact, it’s more common to find roofs with solar panels than without, especially in Sunny Southern California. Net metering has been around for almost as long. The system in which customers who install renewable energy sources can use to lower their utilities costs first began working in California in 1996. Yep, this billing system has been in place since before Y2K. But what exactly is it? How does it affect you?

In The Beginning

There was one little bill that allowed for private residences who installed solar, wind, or a combination of the two as a way to generate power for their home to receive credit for their energy generation. As an incentive, this bill allowed those with these particular renewable sources in their home to reduce the cost of their electricity by way of a tax incentive. During the day, when the sun is emanating powerful rays at a high rate, your home doesn’t always use the energy these PV panels generate. At that point, the energy created by your home that isn’t getting used gets funneled into the grid which powers larger areas across the city/state. At the end of a 12 month cycle, participating homeowners receive a credit for all the energy they created, but didn’t use.

Since then, the types of renewable energy sources available for net metering have expanded to also include geothermal HVAC, fuel cells, and biogas-electrical systems. The laws around net metering continue to evolve as the technology and our implementation of it does. Nowadays, caps are being introduced on a state-by-state basis. There is no federal regulation for net metering, it varies widely from one state to the next, and it seems to be in a constant state of flux.

What’s All The Fuss About Anyway?

Initially, net metering was another form of incentive for residential users. With net metering returning credits to homeowners at the full retail rate, entire PV solar systems could be paid off in as little as 8 years. In less than a decade, the amount of homeowners who have installed solar on their roofs has jumped from a few hundred thousand to almost 2 million. There’s no use denying – especially in light of recent climate activist activity (go, Greta Thunberg!) – that investing in renewable, green energy sources is vital to our survival as a human race. There will always be, however, the need for individuals to assess their needs and capabilities. Incentives are that perfect little nudge to take the leap and do what’s best for you and the greater good.

Corporate interests, however, still have a part in all of this and that part is their bottom line. It’s basic business that in order to thrive a company needs to increase profits and lower overhead. Utility companies having to pay back their clients’ unused contribution at the end of the year (at retail rate) throws a bit of a wrench in the works. In some states, caps have been put in place that limit the amount of customers who are eligible for net metering programs. Now you’re playing the lottery. A reduction in how much credit you can receive from net metering means that paying off these systems takes longer, depleting the return on your investment.

This about the only time Trickle-Down-Economics seem to work. With the appeal to install solar dwindling, the demand for installing solar takes a hit as a result. For solar companies this means less business and smaller jobs. The solar industry is responsible for employing over 250,000 people. Just like with climate, we want to go forwards and not backwards as we progress in the jobs sector.

It’s a balancing act, that’s certain. There is a learning curve with this and similar large scale transitions like changing the healthcare system. It will continue to evolve, especially as power shifts between parties, people, and corporations. But for our bottom-line, if you can install solar in your home then definitely do. If you can participate in a net metering program, take advantage of it while you can. Stay current and fight for your ability to harness clean energy without breaking your bank.