Net metering, also known as Parallel Generation, allows utility customers who produce energy (for example, from solar panels) to receive credit for that energy from their local utility company.

A net metering agreement usually includes a meter that spins both forward and backward. When energy is produced by the solar panels, the meter spins backwards, and when energy is being used, it spins forward. Generally, any surplus energy produced by the customer is sold back to the utility company.

If your utility company does not offer true net metering, it will may require you to use two meters: one to measure the flow of electricity into the building, the other to measure the flow of electricity out of the building. Some utility companies may not allow you to tie your system to the grid at all. If the utility will only pay you a wholesale rate for your excess electricity, or not at all, you will have a strong incentive to use all the electricity you generate so that it offsets electricity you would otherwise have to purchase at the retail rate. This may be a factor in how you optimize your system size, because you may want to limit the excess electricity you generate. This "dual metering" arrangement is the norm for industrial customers who generate their own power.

For local information on net metering agreements in a state other than Colorado, go to www.dsireusa.org/ and, using the map provided, click on your state or contact your local utility.