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What is net metering?

Shave off the cost of your energy bill with net metering on your solar system.

Net metering allows owners of solar energy systems to get credits (known as feed-in traiffs) when you provide surplus power to the grid. A net meter works by tracking the exchange of energy between a solar energy system and the grid.

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Net metering depends on these 2 options

When you decide to install a solar power generation system in your home, you’ll decide between opting for a:

  1. Standalone off-the-grid system.
  2. One that connects to the grid.

Net metering enters the picture if you get a system that connects to the grid, which is the more common scenario.

If you choose net metering, here's what can happen to your energy bill

1. You produce 'excess energy'

When the solar energy system produces more than the energy you require to power your home, the surplus energy goes to the grid.

  • How it affects your bill: The meter runs backward, giving the system's owner credits for the units supplied.

2. You use more energy than you produce

If your solar energy system produces less than the required energy for how much you use, your home gets the deficit energy through the grid.

  • How it affects your bill: The meter runs forward and you are charged for the deficit.

Depending on you system type, it will either send energy to the grid in intervals e.g. every 30 minutes, or at the end of the day. When opting for net metering, you should ensure that your meter runs on an interval system. This way the system can collect and send energy to the grid every 30 minutes, as opposed to at the end of the day — and can lead to more savings in the long run.

What about gross metering?

A gross meter measures the import and export of power separately. In this case, you provide all the energy your solar energy system produces to the grid while using power from the grid at the same time. At the end of the month, while you pay for the power you use, you receive compensation for the power you pump into the grid.

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Which one’s better for your energy bill?

Policies regarding providing power to the grid vary from one state to another. New South Wales and the Australian Capital Territory have offered more lucrative prices in the past to those who opt in for the gross feed-in tariff rate. On the other hand, if you live in Victoria, Queensland, or South Australia and have nominal requirements for power, you can benefit by going the net feed-in tariff rate way. Bear in mind that switching from net metering to gross metering, or the other way around, is not particularly easy, and you might have to spend some money to accomplish this.

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How can I pay less for my energy through net metering?

Using solar power enables you to reduce how much you pay towards electricity bills. In the past, when you supplied power to the grid, you could expect to receive monetary benefits in return. However, the infrastructure costs involved in maintaining the solar energy framework have seen feed-in tariffs get lower every year.

Feed-in tariffs can vary from one local energy authority to the next and in the current market, you can expect your electricity provider to pay around 2-10 cents per kWh, depending on your specific plan. While this might not seem like much it can add up to a significant sum over time.

To maximise the benefits of your solar energy system, consider doing tasks that involve excessive use of electricity during the day, using your own solar power when the sun is shining bright.

How much can I save?

Just how much money you can save or make depends on multiple factors, including:

  • The site, size, and quality of your solar power system
  • Prevalent weather conditions
  • Pattern of your electricity usage
  • The feed in tariff you stand to receive
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Why is the feed-in tariff lower than what I pay?

Power companies have to bear substantial costs to generate, transport and sell electricity. They also have to bear additional costs when they take power from an individual user and pass it on to others. These can include network costs when electricity travels over any distance; retails costs incurred marketing, billing, and providing customer support; and costs incurred because of complying with environmental schemes.

Harnessing the sun for power is certainly a good idea, and the fact that you can look forward to monetary benefits by supplying power to the grid through net metering is a definite plus.

Curious about how solar feed-in tariffs work? Read more on our guide

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