Understanding Solar Net Metering
Net metering is the rule that lets your solar system "bank" extra electricity with the utility and pull it back later. It's the reason a grid-connected solar system can cover your nighttime use without a battery.
Last updated 2026-08-19
Here's the simple version of what happens each day:
Solar production
During the day, your panels generate electricity.
Home consumption
Your home uses whatever it needs first.
Excess electricity
Any extra flows out to the grid through your meter.
Utility credits
Your utility records that extra power as a credit on your account.
Grid consumption
At night (or on cloudy days), you pull power from the grid.
Monthly billing
Your bill nets production against consumption over the billing period.
Tall green bars in the middle of the day = extra power sent to the grid as credits. Gray bars at night = power pulled back from those credits.
In the chart above, the tall green bars in the middle of the day are power you produced but didn't need — that's what gets banked as credits. The gray bars at night are power you pull back, ideally covered by those credits.
Net metering in New Jersey
New Jersey has historically required investor-owned utilities to offer net metering to residential solar customers, crediting excess generation at the retail rate and carrying credits forward, with an annual true-up. Eligible technologies and capacity caps have applied. Details — including which utilities participate and how credits are settled — should be verified for your specific utility and the current tariff.
NJ utilities
Net metering in Pennsylvania
Pennsylvania requires the major electric distribution companies to offer net metering to qualifying residential systems, generally crediting excess generation and carrying credits forward, with an annual true-up. Compensation rules and system-size limits can differ by utility and over time, so homeowners on PECO, PPL, Met-Ed, and others should confirm the current terms for their utility and tariff.
Programs change
Does solar eliminate my electric bill?
Not necessarily
A well-sized system can offset most or all of your energy (kWh) usage over a year, but you may still receive a bill that includes connection charges, taxes, or minimum fees depending on your utility and tariff. The reduction in your bill can still be substantial — just don't expect it to read literally zero every month.
Next step
Want to see how a solar system could work on your home?
Upload your electric bill and request a free solar assessment.
About Charles Brogden
Charles Brogden works directly with homeowners through AllSeason Solar & Roofing, helping customers understand solar system design, equipment, roofing considerations and available solar options.
Serving homeowners throughout New Jersey and Pennsylvania.