Net metering

Net metering is a billing arrangement that credits electricity customers for power they export to the grid from their own generation, usually reducing charges for electricity drawn later.

Bidirectional meter: An electricity meter that records energy flowing both from the grid to a customer and from the customer to the grid. It measures both imported and exported electricity for net-metered billing.
Rooftop solar power: Electricity generated by solar photovoltaic panels installed on building rooftops. Rooftop systems often export surplus daytime generation under net-metering rules.
Feed-in tariff: A policy that pays renewable electricity generators a specified price for power supplied to the grid. It pays for generation under a set tariff rather than netting exports against imports.
Distributed energy resources: Small-scale energy resources connected to the distribution system, including generation, storage, and flexible demand. Net metering is one policy governing how a subset of these resources interacts with the grid.
Public Utility Regulatory Policies Act of 1978: A United States federal law that encouraged energy conservation and required utilities to purchase power from qualifying facilities. Its provisions helped establish a legal setting for customer generation and utility interconnection.
Net billing: A billing arrangement that separately values electricity imported from and exported to the grid. Unlike net metering, it can credit exports at a different rate from retail imports.
Photovoltaic system: A system that converts sunlight directly into electricity using photovoltaic cells. It is the most common small-scale generator associated with net metering.
Avoided cost: The expense a utility avoids by obtaining electricity from another source instead of generating or procuring it itself. Some export-credit policies use avoided cost instead of the retail rate.
Utility cost-of-service regulation: A regulatory method that sets utility revenue requirements based on prudent costs and an allowed return. Export credits can affect how fixed grid costs are recovered from customers.
Net Energy Metering in California: California’s state policy framework for billing customers who generate electricity and export it to the grid. California became a prominent example of net-metering legislation and successive tariff revisions.

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