net metering

California's solar industry scored a significant policy victory with the passage of AB 510, which raises the requirement on the state’s electric utilities to “net meter” customer-sited solar systems to 5% of a utility’s annual peak demand from 2.5%.

Until now, the U.S. solar photovoltaics (PV) market has been dominated by small to intermediate-scale systems installed on the customer side of the meter, which serve to displace grid electricity used by individual electricity customers with clean solar-generated electricity.

The feed-in tariff (FiT) and net metering are both methods by which a utility company compensates a homeowner or other producer for the energy fed back into the grid. Simply put, net metering requires one meter, FiT requires two.

In net metering the meter simply “runs backwards” when a homeowner’s solar panels are producing more electricity than the property is using, sending the excess energy back through transmission lines to other energy consumers.