Solar Power and Net Metering
Solar Power Systems and the Electric System Work Together.
Most solar photovoltaic (PV) systems in New Jersey are connected to the local utility’s electric system. This connection provides two benefits:
- First, there will be times when you’ll need power from the electric system, like on a cloudy day or when there’s snow covering your solar panels.
- Second, at times when your PV system is generating more power than you need, the excess power flows into the electric system and earns you “energy credits” that will reduce future bills.
This works through a process called “net metering.”
A customer with a solar system is a buyer and a supplier of electricity. You're a buyer at night – or on days with reduced sunlight - when you need electricity from the grid to run the equipment in your house or business. You're a supplier when your PV system is generating more power than you need and the excess flows into the electric system. Measuring the flow of electricity in two directions requires a “net meter.” Your meter has two registers, both going forward but one at a time. One register is measuring the electricity you are consuming from the PSE&G grid, the other measuring the electricity you are providing to the grid. You’ll receive a PSEG bill every month based on your “net consumption” of electricity, measured in kilowatt hours (kWh).
The net consumption is the difference between the amount of electricity drawn from PSEG when your PV System is not meeting your household needs and the amount you exported when the Panels were producing in excess to your household needs. Keep in mind; you use your Solar Panel’s electricity first.
Your Cumulative Credits
|Net meter transactions are based on a 12-month "contract year," which typically begins on the date we install the net meter. The Cumulative Difference column on your bill is a record of the credits you have accumulated since your last anniversary true up. The first bill example below shows a month when more power was produced by your PV System than used - one credit is added to the bank for each excess kilowatt-hour (kWh). The second example below shows a month when not enough power was produced - credits carried forward from previous months are used to reduce the bill.
Get the Most Value from Your Credits
At the end of the 12-month contract year, there’s an Anniversary True Up when we calculate the monetary value of any remaining energy credits. The accumulated credit is then reset to zero to begin the next 12-month period. You'll get the most value from energy credits when they're used during the year to reduce your bill. That happens automatically in months when you’ve used more power than you produced. The best month for your Anniversary True Up is the month before you begin to accumulate the most electricity credits to use towards months in which you may need electricity from us. The Anniversary True-Up date you start off with is usually the date we installed the net meter - it may not be the best date. As a courtesy, we will change this date one time, at your request. We recommend customers wait until they have a year’s worth of history with Solar to make the most informed decision. For questions call 609-291-5239 (for residential customers) or 1-800-722-0256 Option #5 (for commercial customers). The value of any credits remaining after the Anniversary True Up will be applied to your account balance and you’ll see this credit displayed on your normal monthly bill. You will only see this if there are credits remaining.
- The difference between total kWh In and total kWh Out.
- Previous "banked" kWh amount.
- Current billable kWh amount.
Determining the Value of Energy Credits
At the annual reconciliation , we use the market price from New Jersey’s Clean Energy Program to determine the value of the credits you have accumulated. This rate is the actual cost to purchase power and does not include delivery and system charges.
The rate uses hourly prices generated by PJM, which operates New Jersey’s competitive electricity wholesale markets. The hourly prices are based on the type of customer (residential or commercial) and the type of voltage (primary, secondary, or transmission). Those prices vary based on the cost of fuels used to generate electricity, as well as demand for and the availability of electricity.
Quick Tips and Facts
- Only your solar contractor can provide solar production reports.
- PSE&G only records customer’s interaction with the PSE&G grid. That is, the energy that your Solar Panel produces but is consumed for your own home needs is not recorded.
- If there is an outage affecting power in your area, you will also lose power unless your solar PV system includes a battery backup. This is for safety - it would be dangerous to have power flowing into the electric system while crews are working on repairs.
- For commercial customers, there is a potential lag time from when your Solar Panels are installed and when you receive the bill. Please be patient as we are delaying your bill to ensure accuracy in the meter reads and the bill total.
Frequently Asked Questions
Solar energy systems covert sunlight directly into direct current (DC) power through an array of solar cell modules mounted on your roof. An inverter converts this DC power into alternating current (AC) power that can be used in your house.
Your solar energy system will be interconnected with PSE&G’s distribution system. If your system produces more electricity than your home is using, PSE&G will credit your utility account for the excess power being returned to the distribution system. This is called net metering.
PSE&G will continue to provide power as usual at night and during the day when your electricity demand exceeds that which is produced by your system
Solar photovoltaic panels work best when mounted on an unobstructed roof with limited shading at an angle that captures the most possible sunlight.
Yes. Solar energy systems are designed to be compatible with utility power.
In most cases, your system will automatically shut down in the event of an outage to protect utility workers as they restore power. However, some system designs include isolation circuitry that allows continued operation. We recommend that you discuss with your solar contractor.
Sunlight must be present for solar modules to produce power, so you will still need to draw power from your utility at night. Under an overcast sky, solar panels typically only produce a nominal amount of electricity
The average size of a residential solar energy system in New Jersey is approximately eight kilowatts (kW).
However, the size of your system is limited to your home’s annual electricity needs. Your solar contractor should be able to provide you with further guidance. The amount of money you will save on your energy bill depends on many factors, such as the efficiency of your solar energy system. Your solar contractor can review the specific details with you.
No. You must hire a solar contractor. PSE&G recommends that you request proposals from a minimum of three contractors before proceeding.
See a list of solar contractors we have worked with in the past.* Go Now
*We do not endorse any specific contractors.
A standard electric meter does not register the flow of electricity in two directions.
The meter has two registers which share the same display, so it is always cycling back and forth between the two. The Identifiers for the 2 registers are the numbers “100” and “101”. It will cycle between the number “100” with a 5 digit number associated and “101” with a 5 digit number associated. The 5 digit numbers are the readings and we need both. The “100” register equates to the usage “In” and the “101” register equates to “Out”. Readings can be forwarded to SolarBilling@pseg.com.
For additional information, view How to Read Your Net Meter.
Your account will be removed from the Equal Payment Plan and you’ll receive monthly bills based on your net consumption.
When you have solar power you’re still connected to the electric system, which serves as a 24/7 backup to your PV system. Every month, you’ll receive some power from the electric system, like at night. Your bill will include the credits you received for the excess power and a daily service charge that covers your connection to the electric system.
Each Time-of-Use period has its own Energy Credit Bank. Excess generation during a "Peak" period is credited to the "Peak" period energy bank, and can only offset future "Peak" period usage. Similar energy banks are created for other periods. “Peak” and “Off Peak” energy banks cannot be combined.
“In” is the electric drawn from PSEG when the Solar Panels are not providing enough electric to meet household needs. “Out” is when the Solar Panels’ production exceeds household needs and the customer exports the excess to PSEG. “Out” gets credited against “In” & customer is billed the difference. If the difference is negative, that is in the customer’s favor and that excess gets banked against the account to be used in later months. There is a once-yearly reckoning of this bank called the Anniversary True-up.
PSEG is only recording the customer’s unused excess of the Solar Panel’s electricity. The difference in the production versus the “Out” is what the customer uses of the Panel’s electricity.
At its most basic, any bill from PSEG is for what electric isn’t covered by the Solar Panel’s Production. The higher the bill, the more electric the customer requires from PSEG.