💵 Net Metering Savings

Written and maintained by the PhDino author · Last reviewed 21 September 2026 · Checked against 2 independent reference calculations · how PhDino checks its numbers

How solar production that doesn't match consumption in real time still shows up as bill savings.

A home's solar panels and its actual electricity use rarely match up minute to minute — panels produce the most at midday, while a lot of household use happens in the morning and evening. Net metering is the billing arrangement that makes solar worthwhile anyway: when panels produce more than the home is using at that moment, the excess flows back to the grid and the utility credits it, typically at or near the same rate charged for electricity bought back later.

Over a billing period, what actually gets saved is the electricity the home would otherwise have had to buy — production up to the amount actually consumed offsets the bill directly, while any true excess becomes a banked credit for a future period (commonly a future month, sometimes with an annual reset, depending on the utility's specific policy).

Key formula

Monthly savings = min(production, consumption) × utility rate
Excess credit = max(0, production − consumption)

Notes & limitations

• This assumes simple 1:1 net metering — production is credited at the same rate as consumption. Real utility policies vary widely: some pay a lower wholesale rate for excess export, some cap how much credit can roll over, and a growing number use time-of-use rates where the value of solar export depends on the hour it happens.
• Because production and consumption are compared only as monthly totals here, this doesn't capture the hour-by-hour mismatch a true net-metering bill calculation would — it's a reasonable planning estimate, not a substitute for reading the specific utility tariff that applies to a given system.