Residential Net Metering

Will La Dow
December 5, 2017

Submitted as coursework for PH240, Stanford University, Fall 2016


Net Metering is a system that allows residents to play a more active role in their energy billing process. With this system, residents are able to produce their own energy with the use of Distributed Generation (DG) Systems and apply that energy toward their own usage. DG systems are small producers and storers of energy at the residential level (solar panels, fuel cells, microturbines, etc). If they generate too much energy, the energy companies are required to buy it back at the same rate and is distributed locally to other customers. [1] The customers only pay for net usage, meaning the energy they create is subtracted from their bill. This system allows for residents to minimize their energy bill, while providing an additional source of electricity to energy companies.

Pros and Cons of Net Metering

Net Metering allows for the utility bills of DG Systems users to decrease, and decreases the amount of fossil fuel used to produce energy. This helps the environment, as well as the users of DG Systems. The system is not as beneficial for the households who are unable to purchase their own energy producers, because the fixed cost of energy production is the same with or without net metering. Because of this, energy rates are increased. This means households who don't produce their own energy have to deal with much higher rates. [2]


Net Metering is a very interesting system of energy usage that aims to lower cost to DG system users and reduce carbon emissions. The system unfortunately has its down side because it imposes a larger stress on non DG households. Many believe the system needs updating, while others believe its benefits far outweigh its negatives.

© Will La Dow. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] "Solar Energy and Net Metering," Edison Electric Institute, January 2016.

[2] K. Tran, "Net Energy Metering and Residential Solar," Physics 240, Stanford University, Fall 2015.