How Net Metering Works in New Jersey
Net metering is how New Jersey handles the electricity your solar system produces but your home does not need in that moment. Understanding it helps explain why a solar home is still connected to the utility and how your bill can be reduced.
Production → Consumption → Credits
Solar Production
Your system generates electricity when the sun is shining.
Home Consumption
Your home uses that electricity first, before pulling from the grid.
Excess Electricity
When you produce more than you are using right now, the extra flows out to the grid.
Utility Grid
The grid receives that excess and stores it as a credit on your account.
Billing Credits
You use those credits to offset electricity you pull from the grid later at night or on low-production days.
The Words on Your Bill, Explained
Solar production
The amount of electricity your system generates, measured in kWh. It goes up and down with sunlight, weather, and season.
Electricity consumption
The total energy your home uses over a period of time, also measured in kWh. This is independent of production.
Utility delivery
The fixed cost the utility charges to remain connected to the grid and deliver power when you need it. Most homes with solar still pay this.
Credits
When your system sends excess electricity to the grid, net metering records it as a credit you can use to offset electricity you draw from the grid later.
Annual usage
Your total electricity use over a year. System size is often compared to annual usage to estimate how much of your usage your system might offset.
The takeaway: having solar does not mean disconnecting from the electric utility. You stay connected to the grid, use your solar first, and use net metering credits to offset the electricity you draw when your system is not producing enough.
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