Net Metering Savings Calculator — Free Solar Net Metering Tool | SurgePV

Net metering is a utility billing arrangement where your solar system's excess electricity production is “banked” as credits on your utility account. When your panels produce more than your home uses (e.g., a sunny midday with nobody home), the surplus flows to the grid and your meter runs backward (or credits accumulate digitally). At night or on cloudy days, you draw from the grid and use those banked credits. It effectively turns the grid into a giant battery — at no additional cost to you.

Three reasons: (1) Fixed charges like meter fees and connection charges that solar can't eliminate — typically $5–$20/month; (2) Grid draws on cloudy days or at night that exceed your accumulated credits; (3) If you're on net billing (like California NEM 3.0) rather than true net metering, export credits don't fully offset grid charges because exports are credited at a lower rate than what you pay for grid power. Most solar homeowners still pay $10–$50/month in minimum utility charges even with a well-sized system.

A true-up bill (or true-up statement) is an annual reconciliation of all your energy charges and credits for the year. Under traditional net metering, your utility tracks monthly credit balances throughout the year, then at your 12-month anniversary “true-up date” they calculate whether you owe money or have excess credits. If your solar over-produced relative to your usage, you typically have credits — but most utilities forfeit (or pay wholesale for) those excess annual credits rather than writing you a check. If you under-produced, you owe the balance.

Under traditional net metering (NEM 1.0/2.0), exported solar is credited at your full retail electricity rate — the same rate you pay to buy power. Under net billing (like California's NEM 3.0, effective April 2023), exports are credited at a much lower “avoided cost” rate — typically $0.04–$0.08/kWh compared to retail rates of $0.25–$0.40/kWh in California. This means NEM 3.0 customers earn about 75% less for every kWh they export, making self-consumption and battery storage dramatically more valuable.

On TOU rate plans, the value of electricity changes by time of day. Peak hours (typically 4–9 PM) have higher rates; off-peak hours (overnight and midday on weekends) have lower rates. Solar production peaks around noon — which is often off-peak or “super off-peak” on TOU plans. This means without battery storage, you may be exporting cheap solar at noon and buying expensive grid power at 6 PM. Battery storage changes this equation by storing midday solar for discharge during peak hours, effectively arbitraging the rate difference.

Under traditional net metering at full retail rate: it doesn't matter financially — self-consumed and exported kWh are worth the same rate. Under net billing (NEM 3.0) or reduced-rate export programs: self-consumed solar is always more valuable, often 3–6× more valuable than exported solar. In states like California, maximizing self-consumption through load shifting (running dishwasher, EV, and laundry during peak solar hours) and battery storage is the primary strategy to maximize solar ROI.

Solar offset = (Annual Solar Production / Annual Home Energy Usage) × 100. If your home uses 10,000 kWh/year and your system produces 9,000 kWh/year, you're at 90% offset. A 100% offset doesn't mean a $0 bill — you'll still pay fixed monthly charges ($5–$20/month). Most solar installers aim to size systems at 90–100% offset to maximize net metering value without overproducing (which results in forfeited credits under most utility policies).

Under most utility net metering programs, annual surplus credits are either forfeited (reset to zero) or paid at a low “net surplus compensation” rate of $0.02–$0.05/kWh — well below retail. This is why solar installers typically size systems to cover 90–100% of annual usage, not more. Oversizing your system beyond your annual usage reduces the effective value of every kWh your system produces. If you plan to add an EV or pool, size for future usage — but don't overshoot today's usage without a plan.