Probably one of the most confusing but exciting aspects of installing a photovoltaic system is the possibility of not only escaping a monthly electric bill altogether, but actually getting money back from PSE&G. This can and does happen to many of our customers through a process called net-metering.
What is Net Metering?
Simply put, net metering is a method of billing and calculating energy costs by adding up the total amount of energy created and then subtracting the amount of energy used—the “net” amount of energy used. On Long Island, PSE&G does this on a monthly basis, even if your meter is currently read every two months as many Balanced Billing customers are.
Can My Meter Really Spin Backwards?
YES! For instance, let’s say your electric meter currently reads 00521, like one of our solar customers did in February 2016 (see photo). If your solar panels generate 500 kilowatt hours (KWH) of energy and you only use 341 KWH, at the end of the month your electric meter would go backwards and read 00362. On your electric bill your “electric usage” amount will display as a negative number, in this case -159 KWH.
What Happens When I Generate More Energy Than I Use?
If you have a negative amount in your “electric usage” section of your bill (meaning you produced more than you used), PSE&G will add that amount to the “Energy Credit Bank.” If you repeatedly generate more energy than you use, they will keep adding the overage amount to the balance and your balance of KWHs will go up.
But What Happens When I Use More Energy Than I Create?
If you have KWHs in your Energy Credit Bank, PSE&G will use those first and you won’t have to pay for electricity. If you don’t have anything in your bank, you will be billed at the regular electric rate for the additional energy you need. For example, if you produced 500 KWH in a month but used 600 KWH, you would be charged for 100 KWH only, at the regular rate.
So When Do They Send Me A Check?
Once a year. If you have an overage in your Energy Credit Bank, PSE&G will buy those credits from you, send you a check and your Energy Bank balance will return to zero. Your energy is purchased at market rate, which is $0.08 per KWH as of the summer of 2016. So if you generate 159 KWH per month, like our example customer has the potential for, that’s 1908 KWH for the whole year, or $152.64 when purchased by the electric company.
What About All Those Fees?
If you look closely at your bill, PSE&G has a number of fees in addition to the actual electricity that you normally purchase from them. Here’s an example from one of our customers (see photo). You may have a monetary credit with them because they purchased your energy or, in the case of our customer, because they overcharged her when making the transition from Balanced Billing to net metering. If you have a monetary credit (not a KWH credit), the electric company will pay the bill from that credit and no payment will be due. If you do not have a monetary credit, you will need to pay the bill. But, as most of our customers will tell you, having a $9 electric bill sure beats a $175 bill.
How Do I Set Up Net Metering?
If you work with Solar Dad and Sons, you won’t need to do anything. Once your system is installed, we submit an application to PSE&G for net metering and arrange for all the required NY State testing. Within 2-4 weeks, the electric company will come to your home and replace the standard electric meter with a specialized digital net meter. You won’t need to be present. Once the special meter is installed you will be able to start banking KWH in your Energy Bank.
Ready to stop paying the electric company?