Awaiting expert review. This page covers rules that vary by utility and jurisdiction. It is kept out of search results until a qualified reviewer has checked it; the sources below are dated so you can verify each point.
Quick answer
Net Metering is a utility billing arrangement in which the electricity your solar system sends to the grid is subtracted from the electricity you take from it, so you are billed only for the net amount over a set period.
Each exported kWh earns a credit, usually worth the retail price of a kWh you would otherwise buy. Credits left over at the end of the period are carried forward, paid out at a lower rate, or lost, depending on the state and utility.
Quick facts
The key facts about net metering, with sources:
- EIA definition
- Tariffs that let certain customers reduce the volume of billed grid electricity within a defined billing period 1
- Federal standard
- PURPA §111(d)(11), added in 2005: utilities offer net metering on request, as each state decides 3
- Credit value
- Usually the retail energy price for netted kWh; leftover (net excess) credit often lower
- Netting period
- Hourly, monthly or annual, set by the tariff
- Who sets it
- State law and the state commission; co-op boards and city councils for their own utilities
- Not covered by credits
- Fixed monthly charges and minimum bills, on most tariffs
Key takeaways
- Net metering lets solar you send to the grid cancel out power you buy later in the same billing period.
- It is not one national rule. Each state, and often each utility, writes its own tariff 3.
- Three settings decide what a credit is worth: the netting period, the rate for leftover credit, and the true-up date.
- Credits usually cannot pay fixed monthly charges or minimum bills.
- Many states now move new customers to net billing and keep older customers on their old terms for a set time.
- Before you sign, ask your utility which tariff you will be on and how long you keep it.
What net metering means in plain words
Think of the grid as a bank for your solar power. On a sunny afternoon your panels often make more than your home uses.
The extra flows out to the grid, and the utility writes it down. At night you draw power back.
Net metering lets the power you sent out cancel the power you took in.
The US Energy Information Administration (EIA) defines net metering as tariffs that let certain customers reduce the amount of grid power they are billed for within a set billing period 1. A tariff is the utility’s official price list and rule book, approved by a regulator.
The US Department of Energy describes it as a way for system owners to be paid for solar they export, and notes that eligibility depends on state and utility policy 2. That last point is the catch. Net metering is not one rule. It is hundreds of tariffs with different details.
The path of one exported kilowatt-hour
- Solar panels → DC power → inverter → AC power for your home
- Home uses what it needs → surplus flows out through the two-way meter
- Meter records the export → utility applies a credit on your bill
- Evening or cloudy day → you import power → the credit offsets that import
How net metering works on your bill
Your utility installs or reprograms a two-way (bidirectional) meter. It counts two numbers: kilowatt-hours (kWh) the utility delivers to you, and kWh you deliver to it. A kWh is the unit on your bill; one kWh runs a 1,000-watt heater for an hour. See kilowatt-hour.
At the end of each netting period, the utility subtracts one number from the other. If you imported more, you pay for the difference at your normal rate. If you exported more, the extra becomes a credit. That credit rolls forward to the next bill on most tariffs.
Once a year, many tariffs hold a “true-up.” This is the date the utility settles the bank.
Leftover credit may be paid out at a lower rate, carried on, or wiped to zero.
Your first bill after the switch shows how your utility lays this out; our guide to the first bill after solar walks through one.
Types of net metering: the design choices that change what credits are worth
| Choice | Options you will see | What it does to value |
|---|---|---|
| Netting interval | Instantaneous, hourly, by time-of-use period, monthly, annual | Longer intervals let more exports offset retail-priced imports |
| Credit for net excess | Retail, avoided cost, a fixed rate, or zero | Decides what oversized systems earn |
| Carry-forward and true-up | Monthly rollover; annual reset or cash-out | Unused credit can expire at the true-up date |
| Size limit | kW cap, or a share of annual use | Caps how much you can net |
| Fixed and minimum charges | Per month or per day | Never offset by credits on most tariffs |
| Program cap | A share of the utility’s peak load | Once full, new customers may get a different tariff |
Example: one month under classic monthly net metering
An illustration with round numbers, not a specific tariff: a home uses 900 kWh and its panels produce 700 kWh, of which 300 kWh are used on the spot and 400 kWh are exported.
| Meter reading | kWh |
|---|---|
| Delivered by the utility | 600 (900 used − 300 self-consumed) |
| Exported to the grid | 400 |
| Net billed | 200 kWh at the retail energy rate |
| Not netted | The fixed monthly charge, billed in full |
Under net billing or a time-of-use netting rule the same 400 kWh could be worth less, because exports are valued separately or only against the same time period. See net billing.
Example: how a year of credits can play out
Another round-number illustration, not a real tariff. It shows why the true-up date matters. The system makes a surplus in spring and a shortfall in winter.
| Season | Net result | What happens under monthly rollover with an annual true-up |
|---|---|---|
| Spring (3 months) | +300 kWh surplus | Credit builds up in the bank |
| Summer (3 months) | −150 kWh shortfall | Bank pays for it; 150 kWh left |
| Fall (3 months) | +90 kWh surplus | Bank grows to 240 kWh |
| Winter (3 months) | −180 kWh shortfall | Bank pays for it; 60 kWh left |
| True-up | 60 kWh left over | Paid at the tariff’s net excess rate, carried on, or lost |
If the true-up fell in late spring instead, the bank would be at its fullest on that date. More credit would be cashed out at the lower rate. Ask which month your utility uses. Our net billing calculator lets you test both cases.
Where you will see net metering
- Your installer’s proposal. Savings figures assume a tariff. Check that it names the one you will really be on.
- Your interconnection agreement. This contract with the utility names the rider or schedule. See the interconnection guide.
- Your monthly bill. Look for lines like “kWh delivered,” “kWh received,” “banked kWh” or “net excess credit.”
- Your annual true-up statement. Some utilities send a separate notice when they settle the year.
- State commission orders. Changes to net metering come through formal cases, each with a docket number.
Benefits and limits of net metering
Benefits
- Midday surplus is worth about as much as the power you buy at night, on classic retail-rate tariffs.
- You do not need a battery to use your solar after dark on paper.
- Savings are easy to predict: your bill tracks your net kWh.
- Long netting periods smooth out cloudy months.
Limitations
- Fixed charges and minimum bills stay, so the bill rarely reaches zero.
- Leftover credit at the true-up is often paid at a much lower rate.
- Rules change for new customers, and your protection period can end.
- Size caps limit how large a system you can net.
Why net metering is shrinking for new customers
Utilities argue that a retail-rate credit pays solar owners for more than the energy is worth. The retail rate also pays for wires, poles and customer service. Solar groups argue that exports bring benefits the utility does not count. State regulators weigh both sides in formal cases.
The common outcome is a split. Customers already on net metering keep it for a set time. New customers move to net billing, time-based netting, or a lower credit for leftover kWh. South Carolina and Virginia both followed this pattern, as the local sections below show 9.
For you, the limit is simple. A savings estimate built on classic net metering may not match the tariff you get. Ask for the estimate to be rerun on your real tariff.
What net metering does to cost and payback
Net metering does not change what a system costs to install. It changes what the system saves you, and so how fast it pays back. For installed prices, see our solar cost guide.
Four cost drivers sit inside the tariff. The first is the fixed monthly charge, which credits cannot touch. The second is any minimum bill. The third is the rate for leftover credit. The fourth is any new monthly fee, such as the $1.00 administrative charge in Dominion Energy Virginia’s new tariff 9.
How long the deal lasts matters too. A legacy tariff that ends in a few years gives less value than one locked for the life of the panels. Feed the real terms into a payback calculator rather than trusting a single number on a proposal.
How you get on a net metering tariff
Your installer usually handles the paperwork. The order below is typical; your utility’s steps may differ.
- The installer designs the system within the tariff’s size limit.
- The installer files an interconnection application with the utility, naming the tariff or rider.
- Your local building department issues a permit, and an inspector checks the finished work.
- You sign the interconnection agreement.
- The utility installs or reprograms a two-way meter.
- The utility grants permission to operate. Credits start from that date, not before.
Do not switch the system on before permission arrives. Exporting early can breach the agreement.
Keeping your net metering on track
- Read the “kWh received” line each month. A sudden drop can mean the system or meter has a fault.
- Compare it with your monitoring app. The two numbers should move together.
- Note your true-up month and check the statement when it arrives.
- Tell the utility before you add panels or a battery. A change can move you to a newer tariff.
- Keep your interconnection agreement. You will need it if you sell the house.
Warning signs and when to call
- A bill shows no exported kWh weeks after permission to operate. Call the utility; the meter may not be set up.
- Your proposal’s savings assume “1:1 net metering” but your utility no longer offers it to new customers. Ask the installer to redo the numbers.
- A salesperson says net metering is a federal guarantee. It is not.
- Your bank of credits keeps growing year after year. The system may be too large for the tariff, and you may lose credit at each true-up.
- The utility notices a tariff change in a letter. Read it; a protection period may be ending.
Who makes the rules
Federal level. The Energy Policy Act of 2005 added net metering to PURPA as a standard: “each electric utility shall make available upon request net metering service” to customers it serves (16 U.S.C. §2621(d)(11)) 3.
PURPA standards like this one were for each state commission to consider and decide on. So the real rules are set state by state.
State level. State laws set the frame, and the state utility commission approves each investor-owned utility’s tariff. South Carolina’s rules sit in SC Code Title 58 Ch. 40 (Act 62 of 2019) 4. Virginia’s sit in Va. Code §56-594 for investor-owned utilities 8.
Local utilities. Electric co-ops and city-owned utilities often set their own rules through their boards. Santee Cooper, for example, is not regulated by the South Carolina Public Service Commission 7.
Federal and state rules change. Every rule on this page names its date and source; check the source before you rely on it.
Net metering vs net billing vs avoided-cost buyback
| Net metering | Net billing | Avoided-cost buyback | |
|---|---|---|---|
| How exports are counted | Subtracted from imports over the period | Valued separately as each kWh leaves | Sold to the utility |
| Typical export value | Retail rate for netted kWh | A set export rate, often below retail | The utility’s avoided cost |
| Best for | Homes that export a lot at midday | Homes that use most power on the spot or store it | Larger generators |
| Battery value | Lower | Higher | Higher |
Common misconceptions
- Myth Net metering means the utility pays me cash every month.
- Reality Most tariffs give bill credits, not cash. Payouts, where they exist, are usually once a year and at a lower rate.
- Myth Net metering is a federal law that guarantees me credit.
- Reality Federal law only made it a standard for states to consider. States and utilities set the real terms 3.
- Myth With net metering my bill will be zero.
- Reality Fixed monthly charges and minimum bills usually remain.
- Myth Bigger is always better under net metering.
- Reality Credit beyond your yearly use is often paid at a low rate or lost at the true-up.
- Myth Once I am on net metering, nothing can change.
- Reality Protection lasts as long as the law or order says. South Carolina’s legacy terms end on 31 May 2029 4.
South Carolina: Act 62 and Solar Choice
Under Act 62 of 2019 (SC Code Title 58 Ch. 40), customers who applied before 1 June 2021 keep legacy net metering until 31 May 2029; later applicants go on a Public Service Commission-approved Solar Choice tariff 4.
Duke Energy Carolinas' Rider RSC nets within each time-of-use period each month and credits net excess at $0.0419 per kWh, effective 1 January 2026 5.
Dominion Energy South Carolina's Solar Choice rider banks surplus forward and cashes it out each November at avoided cost (PSC Order No. 2026-374) 6.
Santee Cooper, which the PSC does not regulate, nets hourly under Rider DG-25 and credits $0.0415 per kWh 7. All retrieved 5 October 2026.
Virginia and Georgia
Virginia: the version of Va. Code §56-594 in force today (marked “effective until January 1, 2027”) allows net metering for investor-owned utility customers up to 25 kW residential with a 12-month net metering period.
A new version takes effect on 1 January 2027 (2026 Acts c. 762); it keeps those limits and adds that a small portable solar device, as defined in §56-596.8, is not an eligible generator 8.
For Dominion Energy Virginia, the SCC's final order of 30 April 2026 in Case PUR-2025-00079 keeps annual energy-based netting, credits annual net excess at $0.05829 per kWh and adds a $1.00 monthly charge; it applies to new non-low-income interconnections from about 1 May 2027, and existing customers are not moved 9.
Georgia: rules differ between Georgia Power and the EMCs, and we have not verified the current tariffs; check your utility.
When net metering matters to you, and what to do next
It matters most if your panels make a lot of power at midday while nobody is home. Those are the kWh that get exported. If you work from home and run the air conditioner at noon, you use more on the spot, and the export rules matter less.
Use this rule of thumb. If your tariff credits exports at full retail over a month or a year, a battery adds little to savings. If exports earn much less than retail, using more power on the spot, or storing it, starts to pay. Our battery sizing tool helps with that choice.
Next step: get the tariff name in writing, then ask the five questions below.
Five things to ask your utility or installer
- Which tariff or rider will I be on, and what is its effective date?
- Over what period are imports and exports netted?
- What is a net excess kWh credited at, and when do unused credits expire or pay out?
- Which charges can credits not offset?
- Can a later rule change move me to a different tariff, and for how long am I protected?
Related guides and tools
Questions about net metering
Is net metering going away?
In many states it is being replaced for new customers, not removed for everyone. The usual pattern moves new customers to net billing or time-based netting. Existing customers keep their old terms for a set period.
South Carolina and Virginia both followed that pattern. In South Carolina, legacy customers keep their terms until 31 May 2029. In Virginia, Dominion’s new terms apply only to new non-low-income interconnections from about 1 May 2027.
What happens to unused net metering credits?
It depends on your tariff. Credits usually roll over from month to month. At an annual true-up they may be paid out, carried on, or reset to zero.
Payouts are often at a rate below retail, such as avoided cost. Dominion Energy South Carolina cashes out banked surplus each November at avoided cost. Ask your utility for your true-up month and payout rate.
Do I need a new meter for net metering?
Usually yes, or a reprogrammed one. After the utility approves your interconnection, it installs or sets up a meter that records power in both directions. You do not buy this meter yourself in most cases. Credits start only after the utility grants permission to operate. Running the system before then can breach your agreement.
Does net metering cover my whole electric bill?
No. Credits offset energy charges, the part of the bill priced per kWh. Fixed customer charges and minimum bills normally stay. Some newer tariffs also add a monthly fee, such as the $1.00 charge in Dominion Energy Virginia’s new tariff. So most solar homes still get a small bill each month, even in sunny months.
Can I get net metering with a battery?
Often yes, with conditions. Many tariffs allow storage but limit how it charges. Dominion Energy South Carolina’s rider counts storage only if it charges solely from onsite renewables. Virginia’s §56-594 allows storage.
Ask your utility how it treats a battery before you buy one. Under classic net metering a battery adds backup power more than bill savings.
Is net metering a federal law?
No, not in a way that guarantees you credit. In 2005, Congress added net metering to PURPA as a standard: each utility should offer net metering on request. But state commissions decided whether and how to adopt it. That is why terms differ so much between states and between utilities in one state.
How big a solar system can I net meter?
Your state or utility sets the limit. Virginia’s statute allows up to 25 kW for residential customers of investor-owned utilities, and 20 kW for co-op members.
Duke Energy Carolinas and Dominion Energy South Carolina cap their Solar Choice riders at 20 kW AC. Some rules also cap a system at a share of your yearly use.
What is a true-up in net metering?
A true-up is the date the utility settles your credit bank for the year. Up to that date, surplus kWh roll forward from bill to bill.
On the true-up date, leftover credit is paid out, carried on, or lost, as your tariff says. The month matters: a true-up after your sunniest season leaves more credit to settle at the lower rate.
Does net metering transfer when I sell my house?
Often it does, but check your utility’s rule. The tariff is tied to the account and the system, so the new owner usually has to open a new account and may need to sign the interconnection agreement again.
Legacy protection may or may not carry over. Our guide to buying a house with solar covers the questions to ask.
Is net metering better than net billing?
For most homes it pays more, because exports earn the retail rate. Net billing values each exported kWh at a set export rate, often lower than retail. That makes using power on the spot, or storing it, more valuable. Which one you get is not your choice in most places: your utility’s tariff decides.
Sources
- US EIA, Glossary: Net metering, retrieved .
- US DOE Solar Energy Technologies Office, Homeowner's Guide to Going Solar, retrieved .
- 16 U.S.C. §2621(d)(11), PURPA standard for net metering (Cornell LII), retrieved .
- South Carolina Code Title 58 Ch. 40 (Act 62 of 2019, customer-generators), retrieved .
- Duke Energy Carolinas (SC), Rider RSC Residential Solar Choice (effective 1 January 2026; Docket No. 2020-264-E, Order No. 2021-390), retrieved .
- Dominion Energy South Carolina, Residential Solar Choice rider (PSC Order No. 2026-374, effective July 2026 billing), retrieved .
- Santee Cooper, Distributed Generation Rider DG-25, retrieved .
- Code of Virginia §56-594, Net energy metering provisions (version effective until 1 January 2027 and version effective 1 January 2027), retrieved .
- Virginia SCC, Order on Clarification, Case PUR-2025-00079 (20 May 2026), affirming the 30 April 2026 final order, retrieved .
Expert review
Written by the HyreSolar Research team. Not yet reviewed by an outside expert. We say so rather than imply a review that has not happened; see our editorial policy.
How the numbers were checked: Definitions are EIA and DOE; the federal standard is read from 16 U.S.C. §2621 (Cornell LII). South Carolina rules come from sc-local/facts.js, each tied to the statute or tariff named.
Virginia rules are the rows marked VERIFIED in the HyreSolar Virginia fact pack, and both versions of Va. Code §56-594 were compared on LIS on 8 October 2026. Georgia tariffs were not verified and are not stated. Held for review by a qualified reviewer before indexing (G-REV).
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