For those choosing to install a grid tie or hybrid solar system, it’s important to understand the concept of net metering and how the arrangement works with their electric provider. Net metering is a billing arrangement that allows solar panel owners to receive credit on their utility bills for the excess electricity they generate and supply to the grid. There are two main types of net metering: 1-to-1 net metering and avoided cost net metering.
1-1 Net Metering
1-to-1 net metering is also known as full retail net metering. In this arrangement, the utility company credits the solar panel owner the full retail value of the excess electricity they generate. For example, if you generate one kilowatt-hour (kWh) of electricity and supply it to the grid, you would receive a credit of one kWh on your utility bill. You can use this credit to offset your future electricity consumption. Unfortunately, there are only a few utilities in Georgia that offer 1-to-1 net metering.
Avoided Cost Net Metering
Unlike the less common 1-1 billing arrangement, avoided cost net metering credits the solar panel owner only the “avoided cost” of the excess electricity generated. The “avoided cost” is the cost that the utility would have incurred if it had to generate the same amount of electricity from its own power plants. This cost is usually lower than the full retail value and typically ranges from $0.025 to $0.05 per kWh.
Most utilities in Georgia use avoided cost net metering, providing a lower credit for the excess electricity generated by solar panel owners. However, it’s important to note that different utilities have different rules and requirements for solar net metering, so it’s best to consult with your local utility or a representative from local solar installer like Georgia Solar Pros for more information and guidance.