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As the demand for renewable energy grows, solar panels have become an increasingly popular choice for homeowners in Australia. However, with solar overproduction becoming more common, the debate over net metering versus net billing has intensified. To address this issue, two common methods are used: net metering and net billing.
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What is Net Metering?
Net metering is a billing arrangement that credits homeowners for excess energy generated by their solar panels and sent back to the grid. Under this arrangement, the energy meter measures the amount of energy produced by the solar panels and the amount of energy consumed by the home. If the panels generate more energy than the home consumes, the excess energy is returned to the grid, and the meter records the net energy consumption. The homeowner then receives a credit on their energy bill for the excess energy that was generated.
Net metering is currently the most common arrangement in Australia and is available in all states and territories. The credit applied for excess energy is generally at the same rate as the feed-in tariff charged for energy consumed by the household.
How does Net Metering work in Australia?
A two-way reading is provided via net metering. It can record how much solar energy you use and feed it into the grid. If you had a net metre to take advantage of solar feed-in tariffs, it could calculate how much you owe for the grid.
Import
Demonstrates how much power you draw from the grid. You import energy from the grid when your home consumes more energy than your solar panels can generate. Each kWh of electricity you import is subject to the retail electricity rate, depending on your tariff.
Export
Indicates the amount of solar energy you provide to the grid. You export when your solar panels produce more energy than your home can need at any time. You get compensated with a feed-in tariff for each kWh of electricity you export.
Benefits of net metering
One of the benefits of net metering is that it allows homeowners to offset the cost of their energy bill by using excess energy generated by their solar PV system. This is particularly beneficial during the day when the panels are generating the most energy, and the home is using the least amount of energy. Net metering also provides an incentive for homeowners to size their solar panel system appropriately, as any excess energy that is generated can be fed back into the grid and credited towards their energy bill.
Check out our page to learn more about net metering solar systems.
What is Net Billing?
Net billing is an arrangement that pays homeowners for excess energy generated by their solar panels and sent back to the grid. Under this arrangement, the energy meter measures the amount of energy produced by the solar panels and the amount of energy consumed by the home. Suppose the solar panels generate more energy than the home consumes. In that case, the excess energy is sent back to the grid, and the homeowner is paid for the excess energy that was generated at a rate that is lower than the energy tariff that is charged for energy consumed by the household.
Net billing is less common than net metering in Australia and is only available in certain states and territories, such as Queensland and Western Australia. The rate at which excess energy is paid under net billing arrangements is generally lower than the rate at which energy is charged for energy consumed by the household.
Benefits of net billing
One of the benefits of net billing is that it provides a financial incentive for homeowners to generate as much energy as possible. This can be particularly beneficial for commercial solar energy users, who may have larger solar panel systems and generate a significant amount of excess energy. Additionally, net billing provides an incentive for homeowners to operate their solar panel system as efficiently as possible, as any excess energy that is generated can be sold back to the energy provider.
Which method is right for you?
Choosing between net metering and net billing ultimately comes down to the specific circumstances of each homeowner. Net metering is generally more beneficial for residential solar energy users who want to offset the cost of their energy bill by using excess energy generated by their solar panel system. It also provides an incentive for homeowners to size their solar panel system appropriately, as any excess energy that is generated can be fed back into the grid and credited towards their energy bill.
Net billing may be more beneficial for commercial solar energy users who have larger solar panel systems and generate a significant amount of excess energy. Additionally, net billing provides an incentive for homeowners to operate their solar panel system as efficiently as possible, as any excess energy that is generated can be sold back to the energy provider.
Both net metering and net billing benefit solar energy users in Australia. Understanding the differences between these two billing arrangements and the specific circumstances of your solar panel system can help.
Switching to a better plan?
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