There are many different ways in which a household or a business can save money on their electricity bill or receive payments through its interaction with the grid.

Under net metering, a prosumer sell excess solar electricity to their local utility company at a profit and are credited for the amount of solar electricity they add to the grid – these credits are applied to their monthly electric utility bill, lowering their future energy costs and business’s operating expenses.

Net billing instead, is a monetary exchange. If a household or business does not consume the energy it produces in real time, it will sell it to the utility at a price based on the actual market value (often at wholesale price or at a fixed tariff normally below the retail rate ).

Instead of offsetting the credits (KWh’s) gained from your solar panels’ excess energy as it happens in net metering, net billing systems allow you to sell that energy to the utility.

The compensation rate will be lower with net billing than with net metering since net billing customers receive an avoided cost price per kilowatt-hour from their utility versus a credit at retail cost per kilowatt hour.