Grid & off-grid

Net billing vs net metering comparison

Net billing credits your exports below the retail rate. Enter your exact production, usage, and rate details to see what that gap costs you each month.

Your numbers

1 Project details Optional
Shown on your exported report. Leave blank to skip.
2 Your production and usage
Your estimated or metered average monthly solar output.
Find this on a recent utility bill.
Solar production swings seasonally; pick a specific month type to see how the gap shifts.
Most utilities charge a flat customer or connection fee regardless of usage.
3 Rates for each structure
What you pay per kWh under normal billing.
The share of retail your exports earn under net billing at your utility.
Some net billing tariffs value exports differently by hour. Most solar exports peak midday, when grid value is often lowest.
A simple x12 projection; actual annual totals depend on month-to-month production and usage variation.

How it works

Three steps to your result

Step 1

Enter your production and usage for a specific month

Use your system's estimated or metered monthly output, along with your monthly electricity usage from a recent bill. Select a season type to see how a low winter month compares to a peak summer month.

Step 2

Enter your retail rate and net billing credit

Fill in what you pay per kWh, plus the reduced export credit percentage your utility applies under net billing. Add a time-of-use adjustment if your tariff values exports differently by hour.

Step 3

See the dollar gap between the two structures

The result shows exactly how much more net billing costs you, both in bill terms and in raw export credit value. Extend to a 12-month estimate for a rough annual figure, or check the avoided cost rate calculator to understand how your utility likely set that lower rate.

Why the export credit rate is the whole story

Same solar system, two very different bills

The physical system, the panels, the production, none of that changes between net billing and net metering. What changes is purely how the utility values the electricity you send back to the grid. Under full net metering, every exported kWh offsets an imported kWh dollar for dollar, matching how the U.S. Energy Information Administration defines the structure. Under net billing, exports are credited at a separate, lower rate, which means the same system earns measurably less over its lifetime.

Where the net billing rate comes from

Most net billing rates are based on the utility's avoided cost, an estimate of what it would otherwise cost the utility to generate or purchase that power elsewhere. This is usually well below the retail rate, since retail rates also cover transmission, distribution, and other fixed costs that avoided cost calculations typically exclude. The avoided cost rate calculator breaks down how utilities typically build up that figure.

Why time-of-use export value adds another layer

Some net billing tariffs go further and value exports differently by hour, reflecting how grid demand and wholesale prices fluctuate through the day. Because most residential solar production peaks in the middle of the day, when grid demand and wholesale prices are frequently lower, time-of-use export structures can discount typical solar exports further than a flat average net billing rate would suggest. The time-of-use rate savings calculator models that hour-by-hour value gap directly.

How to reduce the impact of a lower export rate

Since electricity you use yourself is always credited at full retail value, sizing your system closer to your actual usage, using a tool like the system size by monthly kWh usage calculator, reduces how much of your output gets exported at the lower net billing rate rather than maximizing production for its own sake. Shifting usage into daylight hours, or adding a battery as covered in the grid tie with battery backup comparison tool, can capture more of that value directly rather than exporting it for a reduced credit.

Check your specific state's policy

Policy type varies significantly by state. The National Renewable Energy Laboratory counted 12 states that had replaced net metering with an alternative structure by the end of 2024, and some of those states grandfathered existing customers at the old rate rather than moving everyone at once. Check your state's net metering calculator for the current default assumptions where you live.

Questions

Frequently asked

Net metering credits your solar exports at the full retail rate, 1 kWh exported cancels out 1 kWh imported. Net billing credits exports at a separate, usually lower, rate tied closer to the utility's avoided cost, so exports are worth less than imports cost.

Utilities and regulators in some states argue that full retail net metering overpays solar customers relative to the value their exports provide to the grid, especially in the middle of the day when solar output is highest but grid demand is often lower. Net billing is intended to more closely match the export credit to that value.

Yes, in tariffs that value exports by hour rather than a flat rate. Since most solar exports happen midday, and grid value is often lower during those same hours, time-of-use net billing structures frequently discount midday exports further compared to a flat average rate.

No, though it does extend the payback period compared to full net metering. Self-consumed electricity is always credited at full retail value regardless of the export credit rate, so pairing solar with a system sized closer to your actual usage, or adding a battery to store excess for later use, can offset much of the gap.

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