What is net metering and how does it work?

Net metering is a billing arrangement where solar customers receive credit for excess electricity exported to the grid. A bidirectional meter tracks both import and export. When generation exceeds consumption, the meter runs backward (or credits accumulate). At billing time, the customer pays only for net consumption. This effectively values solar exports at retail rate. Policies vary by location - some jurisdictions have moved to time-of-use rates or lower export prices. Net metering significantly improves solar economics for residential and commercial customers.