What is net metering and why should homeowners considering solar care?
With thousands of Iowa homeowners going solar, it’s obvious that home solar is here to stay. But how are normal, everyday people across Iowa affording solar?
With $0 down solar from Purelight, and net metering: a process that helps homeowners who go solar save money year round.
Keep reading for our guide that breaks down what net metering is, how it works in Iowa, and how this simple process helps homeowners with solar save more.
What is Net Metering (NEM)?
Net Metering (NEM), is what allows homeowners in the Hawkeye state who have solar panels to receive a credit for any excess energy produced compared to what your home actually consumes.
When you go solar, your utility provider will come out and install a second meter alongside your normal electric meter. That’s called your net meter.
When your system produces more kilowatt hours of electricity than what your home is consuming, that excess energy is sent back onto your local energy grid. Because you’re helping provide clean energy for your community, you receive payment as a credit to be used by your system in times of lower energy production.
That means that even on the stormiest winter day, your home can still be powered by solar energy.
How does net metering affect your utility bill?
With NEM, you don’t see your utility provider sending you a check each month for the energy you helped supply. But you will see it in your monthly statement.
Additionally, both MidAmerican and Alliant have policies where they’ll roll over your credits regularly every month, at least for up to one year. That’s how those long summer days turn into free energy in the winter.
With a professionally designed solar energy system that can generate not only what your home needs, but enough to build up a bank of credits, homeowners across Iowa are able to go solar and wipe out their power bills year round!
How does net metering work in Iowa?
It’s important to know that 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 rule actually requires utility providers to purchase a customer’s net excess generation 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. Like a homeowner with grid-tied solar.
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 with 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.