Net Metering – Pay For What You Use
Net metering – a policy for consumers who own renewable energy facilities, such as wind, solar power or home fuel cells.

Net metering is growing more popular among those who have alternate methods of energy generation. This can include things such as solar panels and wind turbines while still using commercial utilities. If the area you are in offers net metering, you can take advantage of it without having to buy any special meters. Most conventional meters accurately register the flow of electricity in either direction. The way the meters operate is, the meter spins forward when you are using more electricity that what is being produced. If you are producing more electricity than what is being used, the meter spins backward. During the billing cycle, the net amount of energy produced or consumed is registered on the meter.

Net metering can be profitable to both the utility company and the consumer. The consumer can actually receive credit for the portion of electricity that they generated. There is usually a monthly rollover of kWh, a requirement of monthly payment deficits and a monthly connection fee. There can also be an annual settlement of any residual credit.

There are a few different types of net metering. Time of use metering determines the electricity usage anytime during the day by using a programmed reversible smart electric meter. When a user’s energy use is priced dynamically according to the function of wholesale electric prices, this is considered market rate net metering. The meters will compute the value and are typically read remotely. There is also the alternative to average the electricity consumption or production over the span of a year. This is considered annualized net metering.

One of the goals of net metering is to inspire the consumer to invest in alternative ways to generate energy. As mentioned above, this could be the use of wind turbines or solar panels. Some would see it as a renewable energy reward. Wind energy is an intermittent energy resource and sometimes the energy isn’t being used as it is generated.

Net metering streamlines the combination of household based energy generation with the electrical grid. The cost of net metering is indirect. If you are using more of your own energy and less from the utility company, they are receiving less of your money. One of the best ways to view net metering is, you are just paying for what you use. You will have more control, and you are not continuously at the mercy of someone else.
References

http://en.wikipedia.org/wiki/Net_metering

http://www.awea.org/pubs/factsheets/netmetfin_fs.pdf