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Net metering is a state level electricity policy for consumers who own "qualifying facilities," which are generally smaller, renewable energy sources such as a wind or solar power. Under net metering, a system owner receives retail credit for at least a portion of the electricity they generate. The ideal has your existing electricity meter spinning backwards, effectively banking excess electricity production for future credit. In reality, the rules vary significantly by country and possibly state/province if net metering is available, if and how long you can keep your banked credits, how much the credits are worth (retail/wholesale), etc. In North America, 40 U.S. states have some form of net metering in place, and Canada has an ongoing net metering project. The United Kingdom government is reluctant to introduce the net metering principle because of complications in paying and refunding the value added tax that is payable on electricity, but pilot projects are underway in some areas.
Time of use net metering
This employs a specialized reversable meter that is programmed to value electricity at fixed values during different periods of the day, which may also vary with differing seasons. This is available in California and is highly favorable to smaller systems that displace the highest cost electricity and systems where the user's demand load may be managed so that there is a net production of electricity during high cost periods. This can be done for example, by chilling water during off peak times for air conditioning use during high demand periods, or by pre-cooling the thermal mass of the building during low cost periods.
Market rate net metering
In market rate systems the user's energy use is priced dynamically according to some function of wholesale electric prices. The users' meters are programmed remotely to calculate the value and are read remotely. Net metering applies such variable pricing to excess power produced by a qualifying systems. Market rate metering systems will be implemented in California starting in 2006 and under the terms of California's net metering rules will be applicable to qualifying photovoltaic and wind systems.
Net purchase and sale
Net purchase and sale is a different method of providing power to the electricity grid. It is however a lot less profitable for home users of small renewable energy systems.
External links
"Net metering"