Understanding Net Metering: How Does It Work?

Understanding Net Metering: How Does It Work?

Net metering is a billing system that gives solar energy owners credit for the power they add to the grid. When solar panels produce excess power, it is sent to the grid, and it can then be taken back when the solar plants are not functioning, like during the night or when the day is not sunny. If one unit of solar energy is net-metered, the bi-directional electricity meter will run backwards, and the customers will thus be billed only for the net energy use. Let us see how net metering in Ontario works.

How Does It Work?

For the net metering of solar energy, the solar power systems are connected to the utility grid via the customer’s main service panel and meter. When it generates more power than is needed at the site, then the excess electricity is returned to the grid through the power meter. This reverses the meter from its usual direction. Net metering is availed using a bi-directional meter. As the meter works in both directions, it can either be measured through power purchase (PPA), i.e., when on-site demand is greater than on-site power production, or by returning the power to the grid, i.e., when the customer pays the net of both transactions.  

Power Purchase Agreement

A power purchase agreement is a contract with an electricity retailer to purchase the electricity generated by the renewable energy system for net metering in Ontario. This purchase would be for the electricity you use for your home or business, and the excess electricity is sent to your utility’s grid for getting the requisite credit. The measurement should include OEB-approved plain language standard terms and conditions for residential and business customers. This also includes other provisions to be filled in by the electricity retailers facebook lead form.

One should remember that when you sign a PPA, you still receive a bill from your utility for the electricity you use from the utility’s grid and other charges like delivery and taxes. Also, a PPA may not save you money. Hence, you have to carefully review the terms of the PPA and read the Price Comparison that comes with the PPA. It will help you understand how entering into the PPA can affect some of your electricity costs. Keep in mind that no one can sign you up for a PPA while they are at your home.

You also need to know that your electricity retailer must provide you with a Disclosure Statement and a Price Comparison in the form approved by the OEB; these documents must be provided to you with the PPA. Make sure that you read them carefully before signing them. 

Once you have signed it, the electricity retailer will contact you after 10 to 45 days to verify that you wish to continue it. If you do not want to continue with the PPA, you will not have to pay a cancellation fee. So you can cancel a PPA with no penalty within ten days after signing the PPA and within 30 days after you receive your second bill under the PPA. However, you can cancel it any time after that, but there will be a cancellation fee. Hence you should review your PPA carefully for all cancellation details.

Associated Equipment Agreement

AEA is a contract for a renewable energy system offered by an electricity retailer in association with their PPA. This system can take different forms. Although it is associated with PPA, it is quite different. OEB does not regulate any of the terms or conditions contained in AEAs. You may have to pay fees or penalties under the AEA agreement if you do not enter into the associated PPA or cancel the associated PPA. Hence, make sure that you receive and review the associated PPA before entering into an AEA. Also, keep in mind that along with the provisions relating to the purchase of electricity, the associated PPA should also include certain information about the AEA, including the options, payment terms and obligations to purchase the renewable energy system and any commitments you may have to maintain and operate that system house painter in toronto

Before entering into an AEA, find out if you have to pay a fee or penalty, what happens to the renewable energy system if you move, who will be responsible for maintaining and repairing the renewable energy system, who is liable if something happens to the renewable energy system, who will be responsible for any damage that the renewable energy system may cause to my property, how much electricity will the renewable energy system produce and how fast that will be determined. You also need to keep in mind that the amount of electricity generated by renewable energy systems is variable, and any changes in your environment can have a long-term effect on that amount. So see to it that you carefully review the AEA before you sign it, including the penalties and cancellation provisions.

To Conclude

It is very important that you know your rights and responsibilities before going for net metering. So please do not rush into any agreements; take your time to understand them.

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