Net Metering and Net Billing: What a Solar House Bill Is Saying

Why this matters

A solar house's bill does not show how much electricity the house used. It shows what crossed the meter in each direction, and on many plans only the difference. A heat pump, an EV or a failing pool pump can add hundreds of kWh a month to the house's real consumption while the bill still looks small, because the panels were covering part of it. Months later, when the seasons turn or the solar credit runs out, the customer calls the shop that installed the newest equipment and says the solar "stopped working." Reading the two meter registers, and knowing which kind of crediting the plan uses, is what lets an HVAC tech, an electrician or the office give a straight answer.

Working around a solar system. PV conductors stay energized whenever there is daylight, and opening a disconnect does not de-energize everything upstream of it. A tech who needs the system off for other work uses the labeled shutdown on the house and, for anything inside the PV equipment, the solar installer or a licensed electrician. Nothing on this card involves opening solar equipment.

Three numbers the bill can show, and two it cannot

A solar house has a bidirectional meter with two registers:

• Imported (delivered, received from the grid): energy that came in from the utility when the panels were not covering the house.
• Exported (received by the utility, sent to the grid): solar energy the house did not use at that moment.
• Net: imported minus exported, which some plans bill and some only report.

What the meter never sees:

• Production: everything the panels made. That comes from the inverter or the solar monitoring portal, not the utility.
• Self-consumption: solar used in the house the moment it was made, which is production minus exported.

Consumption, the number every other bill-reading method is built on, is imported plus self-consumption. It can only be computed by combining the utility bill with the solar data.

The bill, laid out

SERVICE 04/02 TO 05/01           BILLING DAYS: 29
RATE: RESIDENTIAL SOLAR
---------------------------------------------------
REGISTER          PREV     CURR     KWH
Imported          21,604   22,416     812    [1]
Exported          30,118   31,164   1,046    [2]
Net (imp - exp)                      -234    [3]
---------------------------------------------------
Customer charge         fixed C              [4]
Energy charge           per plan, see [5]
Non-bypassable charges  812 kWh x N          [4]
Solar credit            per plan, see [5]
Credit carried forward  per plan             [6]
---------------------------------------------------

[1] and [2] are separate meter registers, each read like an ordinary meter: 22,416 minus 21,604 is 812 kWh imported; 31,164 minus 30,118 is 1,046 kWh exported. Utilities label them differently, with words, codes or arrows; the meter's own screens and the bill legend say which is which.

[3] Net is 812 minus 1,046, or negative 234 kWh. The house sent the grid 234 kWh more than it took this period.

[4] Charges that apply regardless. The customer charge, and on many solar plans a set of charges billed on imported kWh that solar credits cannot offset (often called non-bypassable charges), or a minimum bill. A solar house with a net export still pays these.

[5] How the energy is priced depends on the plan, and this is the line where solar tariffs differ most.

[6] Credits carried forward. Many plans bank excess credit month to month and settle at an anniversary, often called a true-up. What happens to leftover credit at true-up, whether it is forfeited, paid out at a lower rate, or rolled forward, depends on the tariff.

Net metering against net billing

Net metering at retail. Imports and exports are netted, kWh for kWh, over the billing period or over a longer period through a bank. An exported kWh is worth the same as an imported one. On the bill above, the energy charge is zero and 234 kWh of credit goes into the bank.

Net billing (sometimes called an export-credit structure). Imports are charged at the retail rate. Exports are credited at a separate export rate, usually lower than retail. The two do not cancel kWh for kWh. On the bill above, with the retail rate written R and the export rate E, the energy portion is 812 R minus 1,046 E.

Take E as 0.4 R for illustration (real export rates vary by tariff, sometimes by hour and season). Then the energy portion is 812 R minus 418.4 R, which is 393.6 R. The same physical month that netted to a credit under retail net metering is a charge under net billing.

Which one applies is set by state policy and the utility's tariff, and often by the date the system was approved: many plans grandfather existing systems on the terms they connected under. California, for example, moved new solar customers of its large investor-owned utilities from net metering to a net billing tariff in 2023 while leaving earlier systems on their original terms for a set period; other states still credit exports at the full retail rate. Do not assume a customer's plan from another customer's, or from the state. Read the rate schedule named on the bill (see related: Net Metering + Solar Billing Reference, and for that one state in detail, California Net Billing Tariff (NEM 3.0) vs Net Metering Reference).

Worked example: the heat pump that "broke the solar"

A customer had a heat pump installed in the fall, replacing a gas furnace. In spring they call: last April's bill showed a 234 kWh credit, this April's shows an import balance, and they want to know whether the heat pump is defective or the panels are failing. They can pull production from their solar monitoring app.

Check each column. Last April: 1,520 minus 1,046 is 474; 812 plus 474 is 1,286; 812 minus 1,046 is negative 234. This April: 1,495 minus 880 is 615; 1,091 plus 615 is 1,706; 1,091 minus 880 is 211.

Production. 1,495 against 1,520 is down 25 kWh, under 2 percent (25 out of 1,520 kWh). Ordinary weather variation and a year of panel aging are both in that range. The panels are fine.

Consumption. 1,706 minus 1,286 is up 420 kWh. That is the new load, and in a shoulder month after switching from gas heat to a heat pump it is a plausible amount of heating plus whatever else changed in the house. Whether 420 kWh is right for this house is a separate question (see related: How to Diagnose a High-Bill Call, in Order).

The net swing. From negative 234 to positive 211 is a swing of 445 kWh. It closes: 420 kWh of extra consumption plus 25 kWh of lost production is 445. The bill moved by more than either piece alone, and the customer could see only the bill.

Under net billing, with E at 0.4 R as above: last April's energy portion was 393.6 R. This April's is 1,091 R minus 880 times 0.4 R, which is 1,091 R minus 352 R, or 739 R. 739 divided by 393.6 is 1.88. The energy portion nearly doubled on a 33 percent rise in consumption (1,706 divided by 1,286 is 1.33), because the new load displaced exports worth E and pulled in imports at R.

What to tell the customer. "Your panels made about the same as last April, within 2 percent. The house used about 420 kWh more, which is the heat pump doing the job the gas furnace used to do. The solar is still covering a large part of the house, it just has more house to cover." If they want to know whether the heat pump's share is reasonable, that is a separate, honest investigation. Do not tell them the bill will go back to a credit.

What changes the reading

Self-consumption is worth more than export under net billing. Every kWh used while the panels produce is a kWh not imported at R, rather than exported at E. A heat pump water heater or a pool pump scheduled for midday, or a thermostat that preconditions the house in the afternoon, shifts value toward the household. Under retail net metering, timing matters much less, because both directions are worth R. This is the one place the crediting model changes equipment advice.

Time-of-use solar plans. Many solar tariffs also price imports and exports by hour, so the same kWh is worth different amounts at noon and at 7 pm (see related: Time-of-Use Rates and Equipment Settings).

A battery. A battery changes what the meter sees: it absorbs midday solar that would have been exported and covers evening imports. Production minus exported then includes energy that went into the battery, so the subtraction above overstates consumption by the battery's round-trip losses. The battery's own app is the data source for how much it stored and returned.

The true-up month. A house that banked credits all summer may show small bills for months, then a large settlement at true-up. That is the timing of the bank, not a change in use (see related: Budget Billing and the True-Up Month Surprise for the similar pattern on levelized billing).

Where readers go wrong

Treating net as consumption. A net of negative 234 does not mean the house used negative energy, or little energy. It used 1,286 kWh.

Reading the exported register as production. Exported is what the house did not use. A house that starts using more at midday exports less with no change in production.

Blaming the panels for a load change. Without production data, a fall in exports looks like a solar fault. With it, the answer usually takes two subtractions.

Assuming the credit model. A tech who tells a net-billing customer that "every kWh you export spins the meter backward" has given them an expectation the bill will not meet.

References

• See related: Net Metering + Solar Billing Reference
• See related: California Net Billing Tariff (NEM 3.0) vs Net Metering Reference
• See related: Anatomy of a Residential Electric Bill, Line by Line
• See related: Reading Energy Data Without Misleading the Customer
• The utility's filed solar or distributed generation tariff and the state commission's net metering rules, which set crediting, true-up and grandfathering for that customer