What if my solar panels produce more electricity than I can use?
- Business of Solar,Panel Talk and Technology
When considering whether to install a solar system on your home or business, you might be surprised to learn there are even more advantages than you previously thought. While solar power provides a clean, renewable source of energy and offers substantial financial savings over the life of the solar system, you may also be able to earn money from excess electricity generation.
As solar panels convert sunlight into electricity, and the inverter transforms this from direct current to alternating current, it provides energy for your home or business. The more efficient the solar panel, the more sunlight it will convert into electricity. Since you only need so much energy to power your home or business, there's a very real possibility that your solar system will end up generating more electricity than you need or can use.
In a scenario when your system produces more energy than needed, your local utility company may provide bill credits for this excess power you put back into the grid. This process, called net metering, lets individuals, companies and groups or neighborhood projects with an on-site distributed generation solar system turn back their meter and sell to their local electric company. The billing system was designed and implemented as an incentive to encourage the adoption of solar systems in both the residential and commercial sectors.
The financial advantage provided by net-metering is the main reason why the majority of residential and commercial solar arrays are in place today.
Measuring net metering
Solar PV net metering capacities grew by 2,235 megawatts in 2015, Market Realist reported. This represents a year-over-year increase by 31 percent in 2015. Most of this has been driven by the quadrupling of technological advancements and supportive policies since 2011. In addition, the rapid adoption of solar energy in the states where it's an option is further spurring more reviews of this beneficial policy.
Currently, not every state has a regulatory infrastructure in place covering net metering. Meanwhile, the policies that are in place vary from location to location, reported the Institute for Local Self-Reliance. Although net metering is still a burgeoning aspect of solar power, due to its financial advantages, it's growing in popularity. As this process grows in usage, it's drawn the eye of traditional energy companies that say they net metering creates unfair economic advantages.
As noted by The NC Clean Energy Technology Center's latest "50 States of Solar," legislators or regulators in 19 states examined the role and consequences of net-metering policies in the third quarter of 2015. Distributed generation solar systems have grown so efficient and successful they are beginning to disrupt the business model of traditional energy distribution. In response to these systems, many utility companies have been pressuring legislative and regulatory bodies for changes in the rules governing the current infrastructure. Topics under discussion by these bodies include changes to net excess generation, aggregate cap alterations and modifying cap limits.
However, due to the success of net-metering projects, it might be tough to convince legislators and regulators to take action. But aside from a few exceptions, multiple states have conducted studies demonstrating that all utility company customers realize both financial and social benefits due to existing net-metered customers providing energy to the grid. A small sample of these studies include:
- In California, the state with the largest market for solar PV generation, a recent study discovered that the net-metering program in place creates a benefit for all residents and did not impose any additional costs on non-participating ratepayers.
- A cost-benefit study of net-energy metering in Missouri discovered every customer in the state received benefits from the program, regardless of whether they installed their own solar systems. The study, conducted by the Missouri Energy Initiative, quashed concerns that solar owners' reduced bills shifted infrastructure costs to non-solar owner customers. Although the study's authors did not quantify the net effect of net metering, they concluded that the net effect is positive.
- The Environment Massachusetts Research and Policy Center conducted a review of 11 recent analyses of net metering in the state and found that these programs deliver greater benefits to the grid and society, through avoided energy costs and investments, reduced financial risks and electricity prices, increased grid resiliency, a decrease in harmful pollutions and a boost in the local economy through more jobs.
Another way to utilize the excess energy generated by a solar system is to store it in a battery. You can store this energy in the battery and use it for a (literal) rainy day when a lack of sunlight might limit the module's electricity production. While some solar systems include a battery as part of the balance-of-system parts, along with the inverter, wires and mounting racks, these batteries are often optional and can make financial sense in cases where net-metering is not an option. Even though residential battery costs are still relatively high compared to the entire solar system, some customers will install them so that these can be used to store energy during black-out situations such as a storm or other catastrophic event.
At Trina Solar, we're dedicated to providing high-quality solar modules that let our customers generate their own clean, renewable energy while reaping financial savings and making the grid more sustainable.
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