Net Metering (why we don't need batteries)

01/21/2019

Net metering is the sole reason solar is becoming so popular these days, let me explain. Most people I talk with who are green to solar's industry believe that in order for solar to operate you must have this large battery bank somewhere in your home. The reason we don't have to depend on batteries (yet) is because the utility companies are being pressured in certain states to create so much clean natural energy in a relatively short timeline that they are willing to help out anyone who installs a renewable energy system (wind, solar, geothermal). In short, government regulations at the state level are pursuing utilities to encourage clean energy, and net metering is one way in which they are producing it. 

What exactly does net metering mean to you? Well it allows you to not have to pay an excessive amount of money on your installation cost for batteries. Net metering takes place when your solar panels produce more electricity than you are using at that time (daytime) you then place that excess energy that your panels produced into a "bank account" (essentially). At night time when your panels are no longer producing any electricity you then pull electricity from your "bank". Many of the large utility company's are doing a 1 to 1 swap, which means that every kWh you produce and send to your "bank account" you can pull that full kWh back at a later time (nighttime). There are some small utility companies that do a percentage based net metering plan. What that means is that when you pull back the kWh's from your "bank" it is not a 1 to 1 swap. Instead they give it back to you partially when you pull from your "bank". My last client I dealt with who had this situation normally gets charged .11 cents per kWh (standard electricity cost) but when they pulled from their stored "bank" they recieved a .04 cent discount. In this situation I recommended that they consider battery usage.  

To summarize, the cost of batteries is still high and makes the initial investment higher which then creates a longer return on investment. Net metering avoids the need for the battery (right now). My prediction is that battery prices are going to drop, and net metering is going to slowly diminish. Utility companies need to reach certain goals by 5 and 10 year dates, and once those goals are hit I believe that they will start to dwindle down the net metering help. The good news is that just in the past year there have been multiple solar battery companies build new manufacturing buildings in the US. This is a clear sign to me that they want to start to get more aggressive with selling batteries to the consumers. I hope that this was informative for you guys and hope that you read next week's blog on how to finance a solar system.