What is "net metering"

n. The practice by utilities of auditing wattage created by renewable resources and using any excess green power created towards one's bill.

Net metering (or net energy metering, NEM) allows consumers who generate some or all of their own electricity to use that electricity anytime, instead of when it is generated. This is particularly important with wind and solar, which are non-dispatchable. Monthly net metering allows consumers to use solar power generated during the day at night, or wind from a windy day later in the month. Annual net metering rolls over a net kilowatt credit to the following month, allowing solar power that was generated in July to be used in December, or wind power from March in August.

Net metering policies can vary significantly by country and by state or province: if net metering is available, if and how long you can keep your banked credits, and how much the credits are worth (retail/wholesale). Most net metering laws involve monthly roll over of kWh credits, a small monthly connection fee, require monthly payment of deficits (i.e. normal electric bill), and annual settlement of any residual credit. Unlike a feed-in tariff (FIT), which requires two meters, net metering uses a single, bi-directional meter and can measure current flowing in two directions. Net metering can be implemented solely as an accounting procedure, and requires no special metering, or even any prior arrangement or notification.

Net metering is an enabling policy designed to foster private investment in renewable energy.