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.”

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).

Net Consumption

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.
Solar Net Metering Program - PSE&G


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 609-227-5100. (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.

 Details of electric charges - Solar Net Metering PSE&G Details of electric charges - Solar Net Metering PSE&G
  1. The difference between total kWh In and total kWh Out.
  2. Previous "banked" kWh amount.
  3. 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