How Does Net Metering Work?

How Does Net Metering Work?

Overview

  • Net metering enables factories to return surplus solar energy to the grid, earning credits to offset future electricity costs, resulting in significant savings.
  • Optimizing energy use, factories can enhance efficiency by scheduling high-energy tasks during peak solar production hours, reducing dependence on grid power.
  • Supported by net metering, solar panel investments deliver a solid return, with potential payback periods as short as 3 to 7 years. Thus, they establish a sustainable and cost-effective long-term energy solution.

With the rising demand for renewable energy, solar power has become a key solution for businesses seeking to reduce their carbon footprint and energy costs. One crucial mechanism supporting this shift is net metering — a system that allows solar-powered factories to earn credits for the excess energy they generate and send back to the grid.

But how does net metering work, and how can it benefit your factory’s operations? In this article, let’s explore how they can be beneficial for your factory and how they can help your business embrace renewable energy and achieve significant sustainability goals.

How Does Net Metering Work?

How Does Net Metering Work?

Net metering operates through a straightforward process that involves several key steps, allowing solar energy system owners to benefit from the energy they produce. By understanding these steps, you can fully leverage the advantages of solar power and optimize your factory’s energy consumption.

Here’s a closer look at how net metering functions from installation to earning credits for excess energy.

Step 1: Installation of Solar Panels

It all starts with the installation of solar panels on your factory’s premises. These panels convert sunlight into electricity, which powers your factory’s operations during the day.

Depending on your energy consumption, these solar panels may generate more electricity than your factory needs at certain times, particularly during peak sunlight hours.

Step 2: Generating Excess Energy

When your factory generates more electricity than it consumes, this excess energy doesn’t go to waste. Instead, the surplus is recorded by your solar system and is ready to be sent back to the local electricity grid.

This excess energy is crucial to the net metering process, as it allows factories to make the most of their solar investments.

Step 3: Sending Excess Energy to the Grid

The excess electricity your factory generates is then fed back into the utility grid. Through a bi-directional meter, the energy flow is tracked in both directions — the electricity your factory consumes from the grid and the electricity it sends back.

The utility provider will also note this energy contribution and offer credits for it.

Step 4: Earning Credits for Excess Energy

The electricity sent back to the grid is credited to your account, effectively reducing your factory’s electricity bill. If you produce more electricity than you consume over a given billing period, the surplus credits can roll over to the next billing cycle.

Over time, this leads to substantial savings on electricity costs, enhancing your return on investment for solar power.

How Does Net Metering Benefit Your Factory?

How Does Net Metering Benefit Your Factory?

It’s easy to feel overwhelmed by the numbers when considering the benefits of net metering for your factory. That’s why, we’re here to break it down for you, making it clear how net metering can help your factory thrive in a sustainable energy landscape.

Lower Electricity Costs

When a factory installs solar panels and generates more electricity than it consumes, the surplus energy can be exported back to the grid, earning credits that offset future electricity bills.

For example, if a factory generates 1,500 kilowatt-hours (kWh) in a month but only uses 1,200 kWh, the extra 300 kWh is credited against its bill. This means that even when the factory draws energy from the grid during non-sunny hours — like at night or on cloudy days — it benefits from reduced costs due to the credits earned from its solar production.

This reduction allows factories to allocate those savings towards other operational needs or reinvest in further energy efficiency measures.

Improved Energy Efficiency

By allowing businesses to earn credits for every kilowatt-hour of surplus energy they send back to the grid, net metering encourages a proactive approach to energy management.

This means that if your factory generates more electricity than it consumes during peak sunlight hours, you can optimize your operations by scheduling energy-intensive tasks — like running machinery or cooling systems — during these times. This not only maximizes the use of solar energy but also reduces reliance on grid electricity during non-sunny periods, contributing to overall sustainability.

ROI for Solar Panels

The net metering program in the Philippines enables businesses to earn credits by sending surplus energy back to the grid. For example, a Php 1 Million investment in solar panels could generate up to Php 300,000 in credits within the first year, achieving ROI in as little as 3–4 years or, on average, 5–7 years.

Beyond immediate electricity savings, net metering creates a sustainable revenue stream, allowing factories to enjoy nearly free electricity long after the initial investment, with solar panels typically lasting 25 years or more.

Key Takeaway

Net metering provides a simple, effective way for factories to cut electricity costs by sending excess energy back to the grid and earning credits to offset future bills. With Solaric’s support, your factory can seamlessly transition to clean energy, maximizing both savings and ROI. Contact us today to discover how solar can benefit your business.

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