In our last post, we talked about what net metering is, and shared three important details that homeowners should check before committing to a given utility company's program.

Net metering is a billing structure which can save (or sometimes even earn) homeowners quite a bit of money over the long run, by selling back to the utility some of the excess energy they produce.

Speaking more precisely, the expression "net metering" is often used to refer to several different types of billing structures which compensate homeowners for the excess energy they sell back.

It is therefore important to know what these specific billing structures consist of, so as to know exactly what kind of program each utility company is offering.

Below, we briefly explain the three main types of billing structures:

I. Traditional Net Metering (or "Net Metering Proper")

When solar professionals use the term "net metering", this is often what they're referring to. It's a billing structure whereby homeowners sell their excess energy back into the grid, receiving compensation for it at the retail rate, in the form of credits.

Homeowners can then make use of these credits as they wish, and can also "bank" them for future use (as we mentioned in the last post, be sure to check the details on a net metering policy to find out whether your credits have an expiry date). Since the energy consumed and the energy sent to the grid are both priced the same (i.e. at the retail rate), a single electric meter will keep track of everything.

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That said, the term "net metering" is sometimes used to refer to other types of billing structures:

II. Buy-All/Sell-All

In this type of billing structure, homeowners automatically sell all the energy their solar panels produce back to their utility company, and therefore also automatically buy from the utility all the energy they use themselves.

In Buy-All/Sell-All, two electric meters are needed: one to keep track of the electricity consumed, and another for the electricity produced by the solar panels and sold to the grid. This is because, in this type of billing structure, the price at which electricity is bought will practically always be different than the one at which it is sold.

For some Buy-All/Sell-All programs, the electricity a home consumes is priced higher than the one its panels produce and sell. This may not be an advantageous setup for homeowners, but sometimes it's the only one a given utility company offers, which means it's good to be aware that such programs exist. This type of program is often called "Net Purchase And Sale".

That said, there are also Buy-All/Sell-All programs wherein the electricity a home consumes is priced lower than the one its panels produce and sell. This can be very beneficial to homeowners, and is often offered by companies to encourage more homeowners to install solar panels. This type of program is often called a "Feed-In Tariff".