Everything You Need to Know About Net Metering
What Net Metering Says About Your Solar
Are you thinking of getting solar panels installed and unsure of which metering system to go with? Do you have solar panels but don’t know what net metering is? Are you just simply fascinated by all things solar? Well then, keep reading because you’ve come to the right place.
What is Net Metering?
Net metering refers to the way electricity companies bill owners of solar power systems. As the amount of solar electricity being exported to the grid needs to be measured, a net meter (or smart meter) will be installed alongside your solar panels. Net meters operate on two counters, imports and exports. Both counters are important as they determine the cost of your electricity bill.
Net meters only record how much, if any, electricity is being imported from the grid plus the amount your system exports to the grid. This means your electricity retailer will charge you at market price for imported energy and compensate you for exported energy. The type of compensation you may be entitled to is known as a feed-in tariff.
Solar Electricity Generation and Feed-In Tariff Rates NSW
A feed-in tariff is a payment received for the excess electricity generated by your solar power system, which is exported back into the grid. The rate is set per kilowatt hour (kWh) and differs between electricity retailers.
However, each year the Independent Pricing and Regulatory Tribunal (IPART) sets a benchmark rate for NSW electricity retailers. For the 2020/21 period, it is 6.0 to 7.3 cents per kWh. This is just a guide; retailers are not required to follow it.
How is Net Metering Calculated?
Upon receiving your electricity bill, the amount you will pay is the difference between the cost of your grid imports and your earnings for solar exports, plus the supply charge.
To break it down even further:
- Exports occur when your solar power system generates more energy than needed and the excess is put back into the grid. You will receive a credit for exporting energy.
- Imports occur if your solar power system generates less than the required energy your home uses and the deficit energy is taken from the grid. You will incur a fee for importing energy.
- The supply charge is the amount you are billed for being connected to the grid.
This means you pay: Usage – Exports + Supply Charge = Your Bill
Can You Make Money Net Metering?
Using solar power not only allows you to reduce the cost of your electricity bill, but it can also see you compensated for the energy your system supplies to the grid. However, it’s important to remember feed-in tariffs can vary from one electricity retailer to the next.
When looking at your electricity bill you will notice there’s no mention of the solar energy that’s been self-consumed, which is typically saving you 25c to 50c per kWh. This causes many into thinking the only financial benefits they’re gaining are from their exported energy. If, however, you take into account all the self-consumed solar energy, you will realise how much you’re actually saving.
To give you an indication of what this could look like, take the following as an example.
Savings according to electricity bill:
- Solar exports: 2,378 kWh x $0.07 = $166.46
- Solar exports: 2,378 kWh x $0.07c = $166.46
- Solar self-consumption: 1,093 kWh x $0.29= $316.97
Total solar savings = $483.43 for the quarter
So, the question here shouldn’t be whether you can make money net metering, but how much you can save.
Net Meter, Gross Meter, Smart Meter – What’s the Difference?
Electricity meters are used to measure the amount of energy your home consumes; and where solar power systems are in place, how much it generates. The three different types of meters available are net, gross and smart. Below lists each meter’s functions and capabilities.
Net meters track the exchange of electricity between solar power systems and the grid. This process calculates how much electricity is being generated and how much is being consumed. For instance, if more energy is being consumed than generated, the remaining energy needed is imported from the grid. Whereas, if more energy is being generated than consumed, the excess amount is exported to the grid.
Gross meters, on the other hand, measure both the import and export of electricity. As all electricity generated by your solar power system is exported to the grid, the electricity used to power your home is imported directly from the grid. This means you pay for all the energy your home uses and receive a feed-in tariff for the energy your system feeds back into the grid.
Unlike a net meter and gross meter, which need to be manually read, smart meters are equipped with a digital two-way communication system that records your home’s daily energy use in at least 30-minute intervals. This information is then sent directly to your electricity retailer who can read the meter remotely, giving you an accurate energy reading instead of an estimated one.
The Australian Energy Regulator (AER) now requires that all new and replacement meters in NSW, ACT, Qld, Vic, SA and Tas are smart meters.
Installation and Cost of a Smart Meter
The first step in getting a smart meter installed is to contact your electricity retailer to find out whether they offer smart meter upgrades. A lot of retailers will install the new meter either free of charge or as part of your electricity contract. It’s important to be aware of any changes to your contract, prices and billing arrangements before installation.
Once an installation date has been set, a qualified technician will be sent to install the new meter. They will need to temporarily turn off your electricity supply while doing this. All related costs and/or changes to your energy contract will come into effect from this date.
Smart Meters and Solar Monitoring Systems
A great advantage smart meters give owners of solar power systems is the ability to take control of their energy usage. Here at HCB Solar, we’re able to equip you with solar monitoring technology to gauge how much energy your home’s using, alert you when things aren’t working correctly and help you use your solar panels smarter.