Brian Sadler from Solaris Renewables talks with John Maher about net metering. He explains how you can reduce or even eliminate your electric bill by installing solar panels.
John Maher: Hi, I’m John Maher. I’m here today with Brian Sadler, Vice President at Solaris Renewables, a solar company in Massachusetts providing premium solar and storage technologies with exceptional customer service in designing, installing and servicing solar systems in Massachusetts, Southern New Hampshire and Maine. Today we’re talking about net metering. Welcome, Brian.
Brian Sadler: Hey, John. Thanks for having me in. I appreciate it.
What Is Net Metering?
John: Yeah, sure. So Brian, net metering is a crucial aspect of solar energy systems. As a solar installer, can you explain what net metering is and how it works?
Brian: Absolutely. I’ll try not to use my hands too much so folks hearing audio can get the picture as well. But essentially it’s how we generate electricity savings. It’s the most basic and fundamental reason that you want to go solar, and folks are compelled by saving money on their electric bill, which is generally speaking, one of our major utilities that folks need to pay on a monthly basis.
So as it stands now, you have a meter on the side of your house and that meter spins, and it spins faster and slower depending on how much you’re using. But every time that spins, it’s a kilowatt-hour of energy that you’re going to be billed for. When you go solar, at the end of your installation and following the inspection, the utility’s going to come out and swap that meter out for a new net meter or bidirectional meter.
So in effect, this meter can spin backwards. So I’m always doing the finger spinning one way and then the finger spinning the other. In reality, it’s going to be a digital meter, but I always use it for effect. But that meter now has the opportunity to spin backwards, which is now walking down the kilowatt-hours that you’re demanding on the grid and that you’re going to be billed for. So instead of getting just all those charges that we’re used to and a larger bill, we’re able to reduce or eliminate our energy demand from the grid with solar through the net metering program.
So fortunately for us, Massachusetts and most of the states in the Northeast have strong net metering programs, Massachusetts being very strong at what’s termed “near retail rate”. So the value is high in the compensation that you get.
How Net Metering Reduces or Eliminates Your Energy Bill
John: So when people talk about, “Oh, I’m selling energy back to the grid,” that’s what it is, is that you have this bidirectional meter and any excess energy that you’re not using in your home at any given time, it actually makes that meter, like you said, theoretically spin backwards.
John: And so you’re, whatever you would have paid for your electricity usage, you’re going to end up paying less than that because you’re putting energy back into the grid that can be used elsewhere.
Brian: Right. So think of it as the spinning meter, right? I think of that because it’s easier to visualize, but in reality it’s digital. But basically when your new net meter goes in, it’s all zeros, and that’s going to start walking up as we’re pulling from the grid, but then it starts getting pushed down during the day when we’re overproducing with our solar system versus what we need. And then now that can be pushed below zero.
You’re still going to have the same utility bill every month. The idea is to make it more of a statement of the give-and-take of credits, but it is going to be on a monthly basis. So inside of a day that meter’s going to spin forwards, backwards, forwards, backwards. You can even watch it as a cloud goes by as it stalls and it starts to move forward again. And then the cloud passes and you can see it starts to go backwards.
But on a monthly basis, your utility’s going to take a snapshot of your usage from your meter, and they’re going to either bill you or credit you. So if you used more than you produced, on that given month you’ll receive the normal electric bill that you always get. It will just be less than you would’ve paid if you didn’t have solar. And then if you overproduced, meaning you made more solar power than you used from the grid on a given month, then you would actually get a credit.
And it’s effectively a real dollar amount, which is the amount of kilowatt-hours more that you put on the grid than what you used, multiplied by what the current net metering rate is. And the net metering rate in Massachusetts, for instance, is what’s called “near retail rate” and is very close to what we pay.
And that moves with the market. So our utility rates typically go up once a year and down once a year, and based on natural gas rates, because we not only generate power with natural gas here in the Northeast, but we also need it for heating our homes in a lot of cases. So that drives up demand, which drives up the cost. So when the utility rates are high in the winter, we’re going to take the credits that we built up over the year and use them in the winter months to offset our bill.
Near Retail Rates for Net Metering in Massachusetts
John: Okay. Now you just mentioned the net metering rates specific to Massachusetts. Are there other types of regulations or rules regarding net metering that are specific to Massachusetts that maybe are different from other regions?
Brian: I think that it’s strong that we get that near retail rate. A lot of other states and even inside of our state, there’s certain utilities that get a customized rate that’s some blend of that arbitrary rate that the utility has chosen. We have 41 municipal light plants here in Massachusetts that have their own utility and their own rules and regulations, their own net metering program. Also, certain system sizes will dictate what your net metering rate would be with the major utilities. But I would say compared to other states that might have no net metering program, or a wholesale rate compensation, that’s a huge difference.
So if we’re paying about 40 cents a kilowatt-hour now and we’re getting back in the high thirties as opposed to getting back wholesale rate, which might be 10 cents or less, it’s a significant difference and a significant way for us to save money here in Massachusetts, and really the Northeast.
How Do Home Solar Systems Connect to the Grid?
John: How’s the actual connection between the solar system and the local utility grid established and how’s that flow of energy managed?
Brian: The connection is via wiring, and there’s a few different ways to go about how we connect the solar system to the service panel. So in a commercial or a residential application, the solar system and battery system in some cases would connect to the service panel, and then on the backside of that service panel is your meter.
And that flow right of electricity comes from the grid and spins the meter one way when it’s coming from the grid. And then when that flow is coming from the property and from the solar system pushing back through the service and through the meter, it’s pushing the meter the other direction. And that’s kind of that flow of power going back and forth.
How Solar Energy Credits Cover Your Power Bill
John: I’ve heard of it as being like homeowners can earn credits for excess energy generated by the solar system. Is that a different situation or is that what we’re talking about here, again, where the meter sort of spins backwards and then you’re either getting a bill or you’re getting a credit at the end of the month? What do we mean when we’re talking about credits?
Brian: And this goes back to, we referred to it earlier, selling the power back. In effect that is happening, but really we want to talk about credits, and the give and take of power, and you are getting credits. So we get billed based on how many kilowatt-hours we use, and then there’s a bunch of fees that we pay, and then there’s a dollar amount.
Net metering credits work the same way. We’re just getting rid of those fees, and there’s an assigned value of the net metering credit, again, based on the state utility you’re in and that utility’s net metering program — and there’s other indicators, maybe system size, things of that nature. But basically you’re getting credit based on the net metering rate that’s assigned to you, given that time of year in some cases. So here again in Massachusetts, there’s a really strong, near retail rate, so it’s usually just a few cents less than what we’re paying.
So they basically take how much you overproduced in kilowatt-hours, multiply times that rate, and then you get a real dollar amount credit. Those credits are essentially infinite. And they roll over, so it’s not like they have to be used in a given time. They basically build up and build up until you need them. So you might need them at the peak of summer when you’re using a lot of air conditioning and you have your pool pump running, for instance.
You might draw back on those credits instead of paying the utility. And then in the winters, of course, when we most often see those credits being used, because we’re building up through the peak production times of the year, spring, summer, fall, we’re able to build up those net metering credits. We have a bank of credits, essentially it’s a dollar amount.
And then we turn into November, especially with Daylight Savings. Days get really short and the sun angle’s really low, and we’re not making as much solar power. And we model for all of this of course, but now we’re taking those net metering credits that we’ve accrued and they’re automatically applying without us doing anything to our energy bills. So in November, we have a $100 bill, but we have $500 worth of credits, well, our bill is paid for by our net metering credits.
And then we go into December, January, February, and in a perfect world, we generate enough credits that’s able to take us through the entire winter. We come back to, say, March and now we’re back getting into the beginning of real [solar] production season, and now we’re building up credits again. So we’re able to cover our electrical demand from the utility, and now we’re building up credits again.
Haven’t Paid an Electric Bill Since Going Solar
John: Okay. So from your experience as a solar installer in Massachusetts, can you share some success stories or examples maybe of how net metering has helped homeowners and businesses to maximize their savings and achieve energy independence?
Brian: Absolutely. I mean, I’m one of them, I would say. And a lot of our employees in our company have adopted solar as well and can speak to the attributes of net metering. So we went solar in 2016 and then again in ’17 when we expanded our system, and we have not paid an electric bill since.
Brian: Now we still get a statement every month. Every single month we get a statement, but it’s really, if we do owe them, it’s just debited out of our credits. So we planned, we oversized our system. We knew that at the time we had an infant, my wife was going to start moving towards working from home.
So we built a heated and cooled studio for her company out back, and then we knew we were looking at heat pumps. We want to electrify and we want to take advantage of solar to do so, and we know that we’re getting an EV at some point, and everyone is. At some point everyone’s going to have EVs, but we knew that these things are coming.
So we said, “Let’s just go bigger now.” One of the big incentive programs was coming to a close, so we just figured the time is now to do it. So we’re a bit oversized. Also, what I would say is a cool feature of net metering here in Massachusetts, and I know other New England states have the same ability, is that because we oversized our system, I should say, and we do overproduce, we actually send some of our net metering credits to my parents’ house who live a half hour away.
Sharing Excess Credits With Others
Brian: On paper we basically assign 30% of our overproduction to their account so that my parents get a line item on their bill and it says they got this much of a credit to them on that month.
Brian: So net metering has really been powerful for us to really control our energy usage and our utility and our spend. And we’ve been saving money year over year, where now we have a significant amount of credits that we draw on every year. So we are able to make it through the winter due to having our system overproduce for the entire year and bank enough credits to get us through.
And that doesn’t always happen, but if you’re minimizing what you’re spending…our bill was not very much. So someone else that might have had a significantly higher electric bill and maybe their property doesn’t support solar to the extent that it can eliminate that, they’re still able to reduce and fix that cost.
As much as can cover your electric bill with solar, you’re able to fix your costs, which I think is what everyone’s trying to do. Right? Everyone’s trying to be mindful of savings. And then obviously the environmental aspect was really more of why we went solar as well. And it is for other folks. But some folks, it’s strictly the bottom line and net metering is how we get there.
Check Out SolarisRenewables.com to Learn More
John: All right. Well, that’s really great information, Brian. Thanks again for speaking with me today.
Brian: Awesome, John. Thank you so much.
John: And for more information, you can visit the website at solarisrenewables.com or call 781-270-6555.