Understanding net metering vs. net billing
How much less exports are worth under net billing
Often significantly less. A business exporting 8,000 kWh a month at a $0.11/kWh retail rate would earn $880 in credits under net metering, but only $360 under a net billing rate of $0.045/kWh, a $520 monthly gap and about $6,240 a year in lost export value. That gap directly affects the payback math in the commercial solar payback calculator, since export credits are part of the total savings a system generates. The U.S. Energy Information Administration's electricity data hub is a useful reference for typical commercial and industrial retail rates by state, which sets the ceiling this comparison is measured against.
Why some utilities use net billing instead of net metering
Utilities and regulators argue that crediting exports at the full retail rate overpays solar owners relative to the actual value of that energy to the grid, which can be closer to the utility's wholesale or avoided-cost rate. Net billing is meant to better reflect that lower value, though the change significantly reduces the return on exported energy for the system owner, a factor worth weighing alongside the time-of-use savings calculator if your utility also uses variable pricing. The DSIRE database, maintained by NC State's Clean Energy Technology Center, tracks which structure applies state by state and is updated as policies change.
How this changes system sizing decisions
Yes, under net billing it often makes more sense to size a system closer to your own usage rather than oversized for maximum export, since exports are worth much less than the energy they'd otherwise offset. A battery also becomes more attractive under net billing, since storing excess production for your own later use can be worth more than exporting it, a comparison worth running through the peak demand battery offset calculator alongside this one. Our grid and off-grid section covers how different interconnection setups affect what your exported energy is worth in more depth. Before you budget, check what you can claim back. The federal tax credit calculator in our Rebates & Incentives section estimates the federal credit and state rebates for a system like this one.
How to find out which structure applies to your business
Your utility's interconnection or net metering tariff document specifies the compensation structure, and it's also often listed on your rate schedule. A local commercial installer familiar with your utility's rules can confirm the current structure and rate before you finalize a system design, and the commercial demand charge calculator can help you pull other rate details from the same bill while you're at it. If your state also offers renewable energy certificates, the SREC value estimator covers that separate revenue stream some states offer on top of net metering credits. A battery can cut demand charges as well as store power. The battery storage size calculator in our Battery & Storage section can help you size one for your peak load.