Net Billing
Net Billing is a solar compensation mechanism where a customer exports excess solar energy to the grid and receives a credit based on the market value of that exported electricity—typically lower than the retail electricity rate. Unlike net metering, where exported and imported energy offset on a 1:1 basis, net billing separates the value of consumed energy from exported energy.
In real-world solar designing workflows, net billing directly impacts system sizing, battery storage decisions, and financial modeling. Installers, EPCs, and developers rely on accurate net billing simulations inside solar proposals and ROI tools to predict payback periods, maximize self-consumption, and reduce long-term grid dependence.
Key Takeaways
- Net billing credits exported solar energy at lower-than-retail rates
- Encourages self-consumption and battery adoption
- Monthly credits reduce bills but do not offset kWh usage
- Accurate financial modeling is essential under net billing
- Increasingly replaces traditional net metering worldwide
What It Is
Net billing is a utility policy framework that defines how customers with solar PV systems are compensated for exporting electricity back to the grid.
Under net billing:
- Imported energy from the grid is charged at the full retail rate
- Exported energy is credited at a lower avoided-cost, wholesale, or TOU-based rate
- Credits reduce the monthly bill amount, not the total kWh consumption
This distinction becomes critical when designing accurate solar proposals, evaluating battery size, or forecasting production using Shadow Analysis and Solar Layout Optimization.
Net billing pushes system design toward:
- Right-sized PV systems
- Better load profile alignment
- Optimized stringing & electrical design
How It Works
Here’s how net billing operates in practical solar engineering and project planning scenarios:
- Solar energy is generated onsite
- Energy first supplies real-time residential or commercial loads.
- Excess electricity is exported to the grid
- Exported power is tracked using bi-directional smart meters.
- Utilities apply export creditsCredits are calculated based on:
- Avoided-cost tariffs
- Wholesale electricity prices
- Time-of-Use (TOU) schedules
- Grid-support incentives (region-specific)
- Grid energy is imported when solar is insufficient
- Imports are billed at full retail rates, often much higher than export credits.
- Monthly bill credits reduce total charges
- Credits lower the payable amount but do not offset kWh usage like net metering.
- Annual or periodic true-ups may apply
This billing structure must be modeled accurately in solar project planning & analysis workflows, especially when forecasting long-term savings.
Types / Variants
1. Fixed Net Billing
Exported energy is credited at a constant avoided-cost rate throughout the year.
2. Time-of-Use (TOU) Net Billing
Export credits vary by time of day, increasing the importance of battery storage and load shifting.
3. Real-Time Market Net Billing
Export rates fluctuate hourly based on wholesale market prices.
4. Net Billing with Export Caps
Only a portion of exported energy receives full credit.
5. Net Billing with Battery Incentives
Higher export rates are offered when paired with batteries that support grid stability.
How It’s Measured
Net billing relies on bidirectional metering and utility tariff structures to calculate compensation.
Key Metrics
- Imported energy (kWh)
- Exported energy (kWh)
- Retail electricity rate
- Export credit rate
- TOU multipliers (if applicable)
Monthly Credit Formula
\text{Bill Credit} = \text{Exported kWh} \times \text{Export Credit Rate}
Energy Charge Formula
\text{Energy Charge} = \text{Imported kWh} \times \text{Retail Rate}
Final Bill
\text{Final Amount Due} = \text{Energy Charge} - \text{Bill Credits} + \text{Fixed Charges}
These calculations are commonly automated inside solar ROI calculators and financial proposal engines.
Practical Guidance
For Solar Designers
- Prioritize self-consumption modeling during solar designing.
- Run shading and production scenarios using Shadow Analysis.
- Combine PV with batteries using Battery Size Calculator.
For Installers & EPCs
- Clearly explain net billing vs net metering using visual solar proposals.
- Show multiple system configurations with different battery options.
- Reference Solar Installers workflows for consistency.
For Developers & Sales Teams
- Model customer ROI using Solar ROI Calculator and Solar Loan Calculator.
- Use Hub — Solar Proposal & Sales to standardize sales workflows.
- Leverage Hub — Solar Business Growth & ROI for scaling strategy.
Real-World Examples
Residential Example
A homeowner exports 150 kWh in a month.
- Retail rate: $0.25/kWh
- Export rate: $0.08/kWh
Credit earned: 150 × $0.08 = $12
Imported energy: 200 × $0.25 = $50
Final bill: $50 − $12 = $38
Designers often recommend batteries to reduce imports and improve self-consumption.
Commercial Example
A supermarket operating a 150 kW system exports power under TOU net billing.
By shifting refrigeration loads to solar hours and storing excess energy, the business improves ROI and reduces exposure to peak tariffs.
Utility-Scale Example
A 5 MW solar plant participates in real-time net billing.
By optimizing site layout and shading using Shadow Analysis, operators align exports with high-value periods and maximize revenue.
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