How Net Metering Can Bring Your Electricity Bill Down?

What is net metering?

Net metering is a billing system offered by utility providers (such as LESCO) based on regulations set forth by the governments, which change depending on where you live. The majority of clients produce more energy than they can use during the day, and this is where net metering comes into play. You can use net metering to sell that extra electricity back to the grid, which will give you credit that you can use to lower your future electricity costs. The net metering system makes sure that all of the energy produced by the solar panel system on your roof is accounted for, even if it may be more than you actually use. 

How does net metering work?

When the sun is shining during the day, your PV panels might be producing more electricity than you utilize. In that situation, your electric meter may begin to run backward, which may appear strange, but this is due to the extra energy being transferred back to the system. In exchange, your utility provider will credit you with credit points on your energy account for the power you supplied. Instead of stressing about your solar panels not producing energy when the moon is out, you may utilize those credit points to purchase electricity from your utility. The utility companies prefer to deal in credit points most of the time, so you won’t typically receive your reward in the form of a check or cash from them. The easiest way to resolve any questions you may have is to get in touch with your utility. 

The cycle of net metering in its most simple steps for you to understand:

• Installing the Solar System
• Preparing the Application
• – Examination and issuing of a NOC
• The signing of the Agreement
• Allotment of a Generation License
• Activation

Net metering companies in Pakistan

Because a majority of utility companies in Pakistan are under the supervision of the Government of Pakistan, the structure of solar net metering in Pakistan is based on laws set by the central government. Some private and state-owned licensed solar net metering companies in Pakistan are mentioned below: 

– FESCO (Faisalabad Electric Supply Company)

– GEPCO (Gujranwala Electric Power Company)

– HESCO (Hyderabad Electric Supply Company)

– IESCO (Islamabad Electric Supply Company)

– LESCO (Lahore Electric Supply Company)

– MEPCO (Multan Electric Power Company)

– PESCO (Peshawar Electric Supply Company)

– QESCO (Quetta Electric Supply Company)

– SEPCO (Sukkur Electric Power Company)

– TESCO (Tribal Electric Supply Company)

– K-Electric (Karachi Electric)

Benefits of Net metering:

Every modern technology mechanism comes with its pros and cons, but net metering tends to be only beneficial for an average consumer. The main benefit of the net metering billing system is that the provider essentially pays you the retail price for the electricity you add to the grid. Net metering holds the potential to reduce your consumption-based electric charges to zero. Different utilities offer different sets of policies; some might even let you carry your credit to apply for the electricity consumption to the next month and so on. 

Regardless, you are saving money at the end of the day. A solar system is an investment but a long-term one. Solar energy is a great investment because it utilizes money, which you would be spending anyhow, to generate financial returns, making it a spectacular opportunity to save money to use elsewhere. It can take you months to cover the payback period, but with the help of the net metering mechanism, you can actually shorten it by a few weeks or even months. The clean and green electricity generated by your PV panels lightens the strain on the public electricity production sector, which provides a helping hand for the utility companies and society in general. 

In fact, net metering policies form a more balanced demand curve for electricity and allow the utility companies to manage it in a better and more organized manner. It is beneficial for the utility companies, as well, since it helps them combat load shedding, which is a major problem in a developing nation like Pakistan. Additionally, you can help to slow down the use of non-renewable energy sources like fossil fuels, which satisfies your need to act responsibly as a citizen.  

How to reduce electricity bills through net metering?

The most important and tricky part about the net metering mechanism is how it helps bring down your electricity bills. In simpler terms, you are feeding the grid with excess electricity you produced and get rewarded with credit points, in return, that you eventually use to buy electricity from the utility company in order to utilize after the sunset when your PV panels do not have any source to produce electricity from. In essence, net metering is when your utility pays you the retail price for the electricity you add to the grid. 

When it comes to net metering, different nations, states, and utility companies have varying policies based on their own interests. Let us take LESCO as an example. A user is qualified to apply if they have a three-phase meter placed on their property. The Pakistani government began encouraging small-scale net metering in 2015 in an effort to address the country’s energy shortage. After installing a solar system by following the rules of NEPRA, consumers make sure that the electricity produced in the DC current is converted to AC current by an inverter. They are paid back for the extra electricity they send to the national grid at the end of each month or can choose to get a discount on the units they have already used.

Final Words

In a nutshell, net metering billing is a utility rate system that enables you to sell solar energy that you are not utilizing back to the grid. The most significant and obvious benefit to consumers is that by using this strategy, they not only reduce their electricity bills but can also help their utility company relieve some of their workloads and encourage green energy while protecting the environment.