Many people in Arizona are switching to solar energy for its advantages, including dependability, efficiency, and tax incentives that come with solar installation. However, a key question among homeowners is whether utility providers in Arizona offer net metering programs like in other states.
Instead of offering net metering, Arizona offers a related program called net billing that enables homeowners to sell any extra electricity they don’t use back to their utility provider. In this article, we will discuss how net metering in other states differs from Arizona’s net billing program and what you get when you sell power back to the grid in Arizona.
What is net metering?
Net metering is where your utility company gives back electricity at the full retail rate for the excess solar energy you generate. The refunded electricity reflects on your meter grid, i.e., start reading from a negative.
For example, if your home’s solar system generates 12 kilowatt-hours (kWh) of solar electricity, but you only use 8 kWh, your utility company pays you the market price for that extra 4 kWh you didn’t consume. However, instead of monetary exchange, the electricity meter runs backward to provide a credit against the electricity you consume in the future.
What is net billing?
Net billing involves selling the excess electricity your solar panels have generated to the utility company instead of your meter running back to provide credit. That means that if your home’s solar system produces 12 kWh of solar electricity, but you only use 8 kWh as it’s in the above scenario, the utility company will compensate you for the extra 4kwh. However, the utility company doesn’t give you a check but offers discounts or credits on future electric bills.
In other words, the main difference between net metering and net billing is how you utilize the excess electricity provided by your solar system. With net metering, excess solar electricity is credited backward at a retail rate, whereas with net billing, you sell excess electricity to the utility company at a wholesale rate.
How does net billing in Arizona work?
The following are the key things you need to know about the Arizona net billing program.
Arizona offers net billing through excess generation credit rates
Utility companies in Arizona offer lower credit rates than the full retail price of electricity they charge homeowners. The main advantage of the net billing program in Arizona is that the excess generation credit rate is updated annually but can’t decrease by more than 10%. Moreover, utility companies provide a price-locking system where you are locked into the same excess credit generation rate for ten years. That means that feature fluctuations and the cost of solar electricity won’t affect you.
Instantaneous netting
This is a net billing method in Arizona where you instantly apply for credits to offset the energy used from the grid. It means your utility company only bills you for your net energy consumption over short intervals rather than the entire billing period.
Go Solar With Solar Optimum
Are you an Arizona resident looking to switch to solar electricity? Solar Optimum offers you solar installation services. We install solar panels and batteries to give you extra savings on your electric bill with net billing. Contact us today for more information and installation services in Arizona.
