Net Metering Explained: How Rooftop Solar Credits Work Today

A home with solar panels makes power during the day, often more than it needs at noon. The extra flows to the grid. At night or on cloudy days, the home pulls power back. A net meter, or a meter that records both directions, tracks the flow.

Here is a simple month with made-up numbers. The panels produce 800 kWh. The home uses 700 kWh in total, some of it straight from the panels and some from the grid. If the sum of exports minus imports is 100 kWh, the utility credits the 100 kWh against a future bill, and the customer still pays the fixed charges. The credit is handled differently in each state.

• Net metering. Each exported kWh offsets one kWh you use later, so the credit equals the retail price you would have paid.
• Net billing. Exports are credited at a separate rate, often lower than the retail price, and imports are billed at the retail price. This makes a system worth less per kWh exported.
• Other designs. Some utilities add fixed charges for solar customers, apply time-of-use prices, or limit how large a system may be.

Many states have moved from simple net metering toward net billing or similar designs, and rules keep changing. California, for example, has moved newer solar customers to a net billing tariff. Always read the current tariff for your utility before you decide.

In 2025, utilities reported about 5,674,320 net-metered residential systems in the United States, with a combined capacity near 56,040 megawatts. Counting systems per 1,000 households, the top five places were:

Source: U.S. Energy Information Administration, Form EIA-861 (final 2025 data), net metering file. Counts cover utilities that report net metering to EIA, so some distributed solar under other programs may not appear.

A bill for a home with solar usually adds a few lines to the ones in our guide to reading a bill:

• Energy delivered to you. The kWh you pulled from the grid.
• Energy delivered to the grid. The kWh your panels exported.
• Net use. Delivered minus exported. A negative number usually becomes a credit.
• Credit balance. Credits carried to later months, and any that expire.
• Fixed or minimum charges. These still apply, so the bill rarely reaches zero.

Rooftop panels you own are only one route. Some households buy power from a solar company under a lease or a power purchase agreement, where the company owns the panels and you pay for what they produce. Community solar lets people who rent or have shaded roofs subscribe to a share of a shared array and receive bill credits. A home battery stores solar power for the evening and can protect against outages.

Each route has its own contract, its own credit rules and its own risks. Ask for the total cost over the whole term, what happens if you move, and who is responsible for repairs.

1. Is the export credit equal to the retail price, or a lower rate?
2. How long is the rate guaranteed, and can the rules change for existing customers?
3. Do unused credits roll over from month to month, and what happens to a balance at the end of the year?
4. Are there extra fixed charges, demand charges or interconnection fees for solar customers?
5. Is there a cap on system size relative to your use?
6. Which tax credits, rebates and incentives apply today? They change often, so check the IRS and your state energy office.

• U.S. Energy Information Administration, Form EIA-861 (final 2025 data)
• U.S. Department of Energy, Energy Saver