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What is Net Metering? How is it changing in 2025?



From the Illinois Shines Website:

Net metering is a policy that allows your distributed generation (on-site) solar project to create additional economic value. Net metering allows you to receive credits on your electricity bill for extra electricity that your solar project generates and sends to the grid.


If you are located in Ameren, ComEd, or MidAmerican service territory, you are eligible for full retail rate net metering (also called 1:1 net metering) as long as (1) you are a residential or small business customer that purchases electricity from your utility, (2) you submit your application prior to January 1, 2025, and (3) you do not take the smart inverter or distributed generation rebate (only available in Ameren and ComEd service territories).


If your solar project makes more electricity than you are using, the electricity flows to the grid. On the other hand, if you use more electricity than your project is generating at any specific time, you will pull electricity from the grid. Your electric utility will “net out” the extra electricity that your project sends to the grid against the electricity that you pull from the grid. The electric utility will then only charge you supply, delivery, and other volumetric fees (fees that are based on kWh usage) on the netted amount of usage.


For example, if your solar project sends 400 kWh of extra electricity to the grid, and you use 500 kWh of electricity from the grid, the utility will only charge you for using 100 kWh of electricity. (For electricity that is produced directly from your solar project that you use onsite, there are no utility charges or credits.) Thinking about it another way, you will receive credits on your electricity bill for electricity that you send back to the grid. Full retail rate net metering means that you are compensated at the same per kWh rate that you pay for electricity (that is, the full retail rate) when your solar project produces more energy than you use.


If you overall send more electricity to the grid in a month than you pull from the grid, the utility will not charge you any volumetric fees (fees that are based on kWh usage), and the extra net metering credits (in kWh) will “roll over” to the next month. You will still have other charges on your bill, such as the customer charge.


If you receive energy supply from an Alternative Retail Electric Supplier (ARES) but your electricity is delivered by Ameren, ComEd, or MidAmerican, the utility will provide net metering of the delivery charges and other volumetric charges (charges based on kWh usage) from the utility. The ARES will be responsible for net meter crediting for supply and transmission charges.


Large commercial and industrial customers generally do not pay the retail rate for electricity supply, and therefore receive fewer net metering credits; instead, they receive credits equal to the electricity provider’s avoided supply cost, rather than the full retail rate (which includes both delivery and supply service charges). 


Net metering policies will change on January 1, 2025, but solar projects that have submitted net metering applications prior to that date will be grandfathered in with full retail rate net metering.

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