Iowa Net Metering
How Does It Work?

Iowa Net Metering – How Does It Work?

When considering a switch to solar for your home, you wind up learning a lot of new terms. One of those, net metering, can be a bit confusing to understand. In short, net metering is a process that helps homeowners who go solar save money. But how?

We’ve created this guide to break down the aspects of how net metering works in Iowa, and how you can reap the benefits. Continue reading below to find out the ins and outs of net metering!

What is Net Metering (NEM)?

Net Metering, also known as Net Energy Metering, is what allows Iowan residents who have solar panels to receive a credit for any excess energy produced compared to what your home actually consumes. Your local utility provider compares these amounts and reflects any credits or subtractions on your monthly statement. 

When your system produces more kilowatt hours of electricity than what your home is consuming, that excess energy is then put back into the grid as a credit to be used by your system in times of lower energy production.

NEM benefits homeowners by spinning their electric meter backwards, truly owning their power and wiping out their monthly power bill. 

Environmentally, NEM can help your local neighborhood and lower-income households by feeding clean energy to them, which helps reduce the emissions of fossil fuels.

How does it affect your utility bill?

With NEM, you don’t see your utility provider sending you a check each month for this buyback, but you will see it in your monthly statement. For example, if your excess of energy as credit is higher than what you had consumed for that month it then rolls over to that next month as credit. 

Additionally, some companies roll over your credits regularly every month, while other companies have a yearly expiration date that will reset your credit balance on your account. 

Taking this into account your system can generate an excess amount of energy from those sunny summer months that will then act as credits for those months where you may not have enough sunlight.

How does net metering work in Iowa?

Both MidAmerican Energy and Aliant measure their NEM differently. While MidAmerican bases it on annual energy use, Aliant bases it on maximum annual demand. According to the IUB, NEM is available to about 89% of residential customers in Iowa.

Iowa’s net-metering subrule actually requires utility providers to purchase a customer’s net excess generation (NEG) at the utility’s avoided cost rate. Avoided cost rate is the minimum amount an electric utility is required to pay an independent power producer – in this case, a homeowner. 

MidAmerican Energy customers can carry their excess energy generation forward for use in the future as a kilowatt-hour (kWh) credit. The NEM kWh offset provides a credit at the customer’s retail electricity rate, or the wholesale market price of electricity as a cents/kilowatt hour (kWh).

How does net metering work specifically with MidAmerican Energy?

An eligible customer of MidAmerican is able to have a system that offsets up to 110 percent of customer’s load. With NEM, the excess energy that is delivered back through the grid to MidAmerican is then subtracted from the energy consumed. 

If a customer consumes more energy than what the system produces for that month, the excess power that the customer had to use is then billed to the customer at the same electric rate normally offered by MidAmerican.

If the customer delivers an excess of energy to the grid of MidAmerican during the billing period, NEM then provides the customer credit that can be stored in their account for future use. MidAmerican customers are not able to cash out on any excess credits. 

How does net metering work specifically with Alliant energy?

For Alliant Energy customers, you can only receive credits on a system that offsets your home up to 100%. If your system produces an excess of energy you will either receive bill credits or back payment.

The amount of your excess energy that is eligible for NEM will be determined by taking your overall consumption (in kilowatt hours, kW) divided by the capacity of your system (in kilowatt hours). 

Purelight Can Help You Get There!

Iowa’s NEM program is a great money-saving tool for homeowners with solar. While the state of Iowa is currently mandating MidAmerican and Alliant to continue with the current NEM agreements, these programs are not set to last long. Many states are attempting to take away the NEM programs for good, eliminating the financial benefits of residential solar. Iowa could be next on the docket.

Homeowners who go solar before the Iowa NEM program is shut down are still able to get grandfathered into the current programs, and Purelight Power wants to help you get there. 

To find out if your roof qualifies for Purelight Power’s zero down program, take our 30-second survey and find out instantly before the NEM program is taken away. 

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