Understanding Net Metering for Business Solar Installations

Solar panel arrays have become an increasingly common sight on the roofs of businesses across the country, but while some advantages to having them installed are obvious from the outset, some can remain somewhat half-discovered, and among these is the concept of net metering. 

What is Net Metering?

Solar net metering measures your power consumption against your solar panels' power. On days when your business produces more solar energy than it uses, the difference is credited back to the business. On days when you use more energy than your solar panels produce, you offset this against those credits. At the end of the billing cycle, you may have a net credit on your bill or a balance to pay. 

Why is Net Metering Important for Businesses?

Solar energy is not evenly distributed. There will be times when your solar array produces more electricity than you need and times when it’s not quite producing enough. Net metering is a way of evening out that imbalance through the national grid. It is a critical part of our renewable energy infrastructure; its benefits extend beyond your bottom line, with the reliability of the grid itself better protected by such arrangements as well. 

How Does Net Metering Work?

Net metering typically offers credit for each kilowatt-hour (kWh) of electricity sent to the grid, which can be redeemed against a kWh used later. When you get a solar energy system installed, the installer replaces the electric meter with a new bi-directional meter, which can record the energy the solar panels that you export to the grid as well as the energy taken from the grid when the solar panels aren’t making enough power to run the home’s appliances. 

At the end of each billing period, your utility provider totals the energy sent to the grid and energy used from the grid to produce a ‘net’ use figure. You'll be billed for the difference if your business uses more electricity than it sent. But if they send more than they used, the utility records a credit balance, which will be applied to the next monthly bill. 

What are the Benefits of Net Metering for Businesses?

Net metering has considerable advantages for businesses. It helps even out your solar energy production against your total usage while saving money because you only pay for energy used in excess of what you produce. Should your business produce more than it consumes, it’s a simple way to possibly earn money and improve your return on investment. 

But the benefits extend beyond your business alone. Net metering makes solar power more financially viable and practical while also encouraging new solar panel installations and protecting the actual grid itself. It could also help you move towards energy independence, in which you no longer have to pay anything for electricity!

Net Metering Policies in the UK

The first net metering policy in the UK, the Feed-in Tariff, started in 2019. Under this scheme, utility companies would pay a fixed rate for electricity exported to the grid, guaranteeing these payments for up to 20 years. 

This scheme has now been closed to new applicants and replaced with the Smart Export Guarantee (SEG). This scheme is also a form of net metering, which can earn solar panel owners a rate per unit of electricity they send to the grid. 

The SEG can greatly benefit solar energy generators, with expected annual earnings of between £80 – £165. Combined with the savings solar panels generate in the first place, this additional income can speed up the return on your solar installation investment. 

The global landscape of net metering reflects the varied energy policies and priorities of different countries. In the United States, net metering is widespread, with each state having its specific regulations. Depending on the state, these can range from full retail rate credits for surplus energy to more limited compensations.

Europe presents a different picture, with Germany leading in renewable energy integration. The country’s feed-in tariff system, akin to net metering, promotes renewable energy through fixed, above-market rates for grid-fed energy. This policy has significantly contributed to Germany's renewable energy growth, including technologies beyond solar, such as wind and biomass. Australia, too, has embraced net metering, with policies varying across states and territories. 

In developing nations, the implementation of net metering is still emerging, balancing energy infrastructure development with renewable incentives. The global trend towards sustainability is influencing more countries to consider net metering as a means to support various renewable energy forms.

Implementing Solar Net Metering in Your Business

Going solar will immediately reduce your utility bill and, as a result, your operating expenses. And with net metering allowing you to sell excess solar electricity into the grid, you can actually monetise your excess solar energy and create an additional revenue stream for your business. 

If you’re looking to install a solar array, the best place to start is by understanding your energy usage in granular detail, which can be best achieved through an energy audit. When looking for an installation partner, make sure that they’re MCS certified. Review websites and word of mouth are both good ways to find out what quality you should expect from one. 

Because you’re doing this on behalf of a business, it’s important to maximise your financial returns. Make sure you’re abreast of the latest incentives for businesses to make the switch to solar (these could be local or national), and if you have a business case to make to others, make sure that you have a clear pathway towards a return on investment. 

Can Net Metering Contribute to My Business's Sustainability Goals?

Yes, it can! Many businesses are setting ambitious sustainability goals, including a commitment to using renewable energy sources. Solar power and net metering were designed to align with your goals and meet your targets for reducing carbon emissions. Every kilowatt of electricity that you don’t take means less coal or natural gas has had to be burned!

The urgency of the climate emergency means considerable incentives are available to businesses who are prepared to make that leap into solar. Net metering makes perfect sense, alleviating strain on the national grid while incentivising businesses to switch to cleaner, greener energy. With money to be saved and an environment to be protect, improving your business sustainability through renewable energy and net metering has never been more appealing.