Can you really make money by selling power back to the utility company? Federal law allows independent power producers to connect to the utility grid and requires utilities to purchase excess electricity.
Generally these utility companies issue credits to homeowners who manage to turn their meter backwards, paying full retail price. Once per year any unused accumulated credits are paid out in the form of a check based on the wholesale or avoided cost for energy. This price is typically 2 to 3 cents per kilowatt.
Net metering refers to your overall usage from the utility company minus the amount of power you have generated. Nearly all standard utility meters can measure both the flow of energy in and out of a home’s system. If you’re considering the installation of a PV solar array you should contact your utility company and ask them to explain their policy on net metering and compensation for surplus power you may generate.