Net metering is the state program that allows Vermont families and businesses to be compensated for the solar electricity that they produce and export to the grid. Under the net metering program, when a solar array is producing more electricity than is being consumed on site, this extra electricity is exported to the utility and offsets electricity that the system owner uses later in the day or month. At the end of the month, the utility calculates the total amount of electricity that the system generated and the total amount of electricity that the customer consumed. If solar generates more power than is used during the month, the customer gets a bill credit that can be used to offset electricity usage any time in the next twelve months. In months when the customer uses more power than the solar array generates, the customer can use banked credits to pay down their bill.
Under ideal conditions, a solar array will generate enough power on an annual basis to fully offset the household’s electricity usage. Historically, this meant that a system needed to generate the same amount of power that the household used. Every kilowatt hour of electricity generated offsets a kilowatt hour of electricity used either within the month or later in the year. For newer systems, a kilowatt hour of generation only offsets about 75 – 80% of a kilowatt hour usage due to a fee, called a siting adjustor, set by the Public Utility Commission. (For more information about how net metering rates are set, see Net Metering Compensation in Depth.)
Typically, solar output will exceed home usage from the spring through the fall, allowing a net metering customer to build up a credit bank that they draw down over the winter. The specific months that a system is generating excess power depend on the size of the solar array and how the household uses electricity (e.g., how much electricity is used for heating versus air conditioning). The table below provides an illustration of what this can look like over the course of a year.
The bill credits generated through net metering cannot be applied to a variety of “non-bypassable” charges that vary by utility but typically include things like base customer service charges, energy efficiency charges, and storm recovery charges. This ensures that net metering customers continue to support basic utility functions.
Today, net metered projects must be built on or adjacent to the parcel where the electricity is used. New net metering projects are almost entirely for rooftop and backyard projects. It is the only state program that supports solar in the built environment.