Within the last few months, net metering has emerged as an important topic in the energy sector. Florida recently passed House Bill 741, which allows utilities to charge solar customers and phases out the purchase value of customer-produced energy in a net metering system. Meanwhile, North Carolina is considering a similar bill in which utility conglomerate Duke Energy proposes a minimum monthly bill of $28 for properties that have added solar and a lower price paid for excess power for only around a third of the energy retail cost. So what's the deal with net metering, and why is it so crucial for solar?

Net metering is when residential and commercial customers get credited for the excess generated solar energy back into the grid. This process helps alleviate the initial costs that solar adopters face when investing in solar, and it also enables solar customers to directly participate in the energy market by selling power back into the grid. The problem that utility companies have is that they are losing revenue from electricity produced and selling it to customers who go solar. They're losing money because theyre buying back the electricity from the price they are selling it for at retail. Essentially, utility companies are not in favor of crediting customers who go solar.

Net metering is critical for the overall growth of the solar market because it provides benefits such as utility bill savings, shorter break-even periods, and reducing pressure off of the grid. Residential solar adopters can save tens of thousands of dollars in lifetime savings, whereas commercial solar adopters can save hundreds of thousands, if not millions, of dollars in lifetime savings off of their utility bills from net metering. Net metering has a shorter break-even period, with the average being about 8.7 years. In states without net metering, the break-even point is much longer; in South Dakota, for example, it can take up to 12 years for solar adopters to see a break-even point. Finally, net metering relieves strain on the electric grid, which is critical in places like California, where utility companies cannot meet heat wave-related electric spikes.

We believe that net metering will not last forever and that now is the best time to invest in solar while it is still available. Despite being one of the most compelling reasons why solar and other forms of renewable energy are proliferating in the United States, net metering is being phased out. Consumers and businesses should consider investing in solar now rather than later to get the best possible return on their solar investments. Waiting any longer increases the risk of net metering being phased out entirely, extending the time it takes to see a return on solar.