What Is Net Energy Metering?

Customers in a distributed generation energy market may have renewable energy devices such as solar panels or wind turbines connected to their meters. The energy generated at this service point, as well as any energy used, could possibly be measured by a single meter, with the energy generated being netted against the energy used. This is called net energy metering (NEM). The meter records a positive number when customers use more energy than they generate, and a negative number when they generate more than they consume. These customers may owe a minimum charge each month. Their actual energy charges and generation credits are accrued until the account is adjusted at the end of a specified period, called the true up period. When the account is trued up, the consumption charges and generation credits for the period are combined to determine if the customer owes money to the utility.