Advantages and Disadvantages of Net Metering Exposed

July 11, 2023

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Are there any disadvantages of net metering a residential solar array? This is a common question among homeowners! One, solar panels are sometimes costly to install. Two, they’re also a long-term commitment, so it’s vital that you’re happy with your purchasing decision!

Disadvantages of net metering include:

  • Power companies potentially reducing their incentives.
  • Some companies limit their compensation.
  • No time-based compensation.
  • Solar panels don’t always produce the power expected.

This is just a quick summation of some disadvantages to net metering systems. If you’re interested in learning more, keep reading! Understanding these issues in greater detail can tell you if solar is right for you. Also, don’t hesitate to speak to a solar panel installation contractor as well. He or she can answer questions specific to your area.

disadvantages of net metering

What Is Net Metering?

To understand the disadvantages of net metering, it’s vital to first understand this process. Net metering provides credit for excessive electricity residential solar panels produce. First, the panels don’t power the home directly but send electricity back to your city’s grid. Second, the homeowner receives credit for any excess power produced.

To illustrate, suppose your panels produce $250 worth of electricity in a month. However, your home only consumes $200 worth of power that same month. In turn, you would receive a $50 credit on your monthly bill.

Consequently, net metering is an excellent choice for homeowners who don’t want to disconnect from city-supplied power. One reason to avoid “going off the grid” completely is that you don’t need to worry about solar battery storage. Two, staying connected to the city grid means not running out of power if those panels don’t produce enough power.

While net metering has several advantages, it also has some disadvantages. Let’s first look at those disadvantages in greater detail and then consider its advantages. This information should allow you to determine if solar is right for you.

What Are the Disadvantages of Net Metering?

Before reviewing the disadvantages of net metering, first note if it’s provided in your area! Not all power grids provide net metering credits to homeowners. Contact your local power company if you’re not sure what they offer for solar panel owners.

If your area doesn’t offer net metering or full connection, you might need to invest in solar batteries. Your home then runs on that stored power until they’re drained, then switches to city-supplied power. So, if you are ready to consider net metering, note some of its disadvantages:

  • Some net metering programs have reduced financial incentives. In other words, the power company gives you credit or other incentives for every energy unit you send back to the grid. However, power companies often adjust their rates or introduce additional fees, reducing net metering financial benefits.
  • Net metering programs often limit the excess electricity you can send back to the grid. Once you reach that threshold, you might not receive credit for surplus electricity your panels produce. In turn, investing in high-quality solar panels that produce lots of excess energy can be a waste.
  • Some areas limit net metering to homeowners and not renters. As a result, you might not benefit from these programs if you rent a home, condo, or other property.
  • Net metering usually doesn’t include time-based compensation. In other words, it doesn’t offer added compensation or incentive for when your panels produce the most power. Consequently, homeowners might not be incentivized to reduce their energy consumption or reliance on city-supplied power.

disadvantages of net metering

What Are the Advantages of Net Metering?

While net metering is not a perfect process in every area, it does offer many advantages for homeowners! In fact, solar installation is growing rapidly throughout the United States due to the advantages it offers. Check out some advantages of net metering if it’s offered in your area:

  • Net metering financial savings is its biggest advantage! Not only can solar panels offset your power costs, but they might earn you some money as well. In turn, you can greatly reduce and even eliminate your power bills year-round. This includes times when those panels don’t produce as much power, such as during winter months.
  • Using net metering makes it easy to track your cost savings as well. Rather than having to calculate power produced by your panels versus city-supplied power, you receive one utility bill. In turn, you can better understand your energy usage and savings!
  • Earning money through solar panels helps offset their installation cost. As a result, net metering is a great incentive to invest in solar.
  • The more homeowners that invest in net metering programs, the greater your grid stability. During peak operating times, solar production means less stress on the grid itself. Consequently, your area might see fewer slowdowns and blackouts.

Is Solar Worth It Without Net Metering?

There are many reasons to consider a solar panel investment even without net metering! Here are a few reasons to consider solar panels for your home or commercial property:

  • Solar produces clean, green energy without fumes, emissions, or pollutants. Consider that power plants produce tons of harmful emissions every year! Consequently, a solar installation reduces your carbon footprint and helps drive the growth of the clean energy sector.
  • Installing solar panels means creating local jobs. You can’t outsource this installation work to anyone else! In turn, a solar investment helps bolster your local economy.
  • Solar panel installations and use help support the development of a decentralized and resilient energy infrastructure. The more property owners that invest in solar, the more stable your local grid.
  • Solar panels increase property values, often by 4% or more. As a result, you can build equity faster with a solar panel investment. You might also sell your property faster and for more money, if you put it on the market.

disadvantages of net metering

Does Net Metering Hurt the Poor?

One criticism against net metering is that property owners with solar panels pay less to maintain their local grid. Remember, what you pay for electricity every month helps support repairs and maintenance to power lines, towers, and the like! In turn, some believe that those costs shift unfairly to property owners or renters without solar panels.

Also, they might suggest that power companies raise their rates in response to solar panel installation. This might be to compensate for their profit loss. However, others might argue that more solar power production means less stress on the grid. Consequently, this can mean less wear and tear and needed maintenance over the years.

Additionally, some might suggest that city-supplied power should be used far less than solar overall. They might argue that it’s good to phase out fossil fuel usage altogether. Also, solar power supporters encourage cities and states to invest in their own solar farms! As a result, everyone would benefit from solar, not just those with panels on their private property.

A Word From Our Team

Go Solar Florida State is happy to help explain the disadvantages of net metering. If you’re interested in finding out more, we encourage you to reach out to our Florida solar installation contractors. We’re happy to explain the state’s net metering programs and how they might work for you. Additionally, we can prepare a solar installation price quote at no charge to you. For more information, fill out our callback form or just pick up the phone!


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