# HOMER Pro 3.12

 Navigation: Design > Components Tab > Grid Net Metering

Net metering is available in Simple Rates and Scheduled Rates modes.

 Variable Description Net Metering Select this option to base grid energy charges on net usage. Net purchases calculated monthly With this option net usage is calculated monthly. Net Purchases Calculated Annually With this option net usage is calculated annually.

Net metering is a billing scheme by which the utility allows you to sell power to the grid at the retail rate. Effectively, and often literally, your electrical meter runs backwards when you are selling surplus power to the grid. At the end of the billing period (either monthly or annually), you are charged for the net amount purchased (purchases minus sales). If the "net grid purchases" value is negative, meaning you sold more than you bought over the billing period, the utility pays you according to the sellback price, which is typically equal to the wholesale or "avoided cost" of power, or zero.

Because the sellback price is often lower than the purchase price, net metering generally results in lower grid costs or greater income. For example, consider a scenario where the price is \$0.20 per kWh, and the sellback price is \$0.10 per kWh. The monthly usage is 1,000 kWh, and the monthly sales are 900 kWh. Without net metering, the cost is \$200 purchased minus \$90 sold, resulting in a \$110 cost. With net-monthly net metering, the calculation for the net usage for the month is 100 kWh. The calculation for the cost is now only \$20.

If you use annual net metering, you have the rest of the year to return this 100 kWh to the grid. In other words: consider an example where six months out of the year you net 100 kWh of usage per month, and the other six months you net 110 kWh of sales to the grid. If you calculate net purchases monthly, you buy \$120 of power and sell \$66, resulting in \$54 in annual cost. If you calculate net purchases annually, you use 600 kWh over the year, and sell 660 kWh, resulting in net sales of 60 kWh or \$6 in income (and \$0 purchased).

With multiple grid rates in Scheduled Rates mode, HOMER calculates net usage within each rate period separately, and then applies the purchase price or sellback price for that rate period. If you select monthly net metering, HOMER finds the net usage for each rate period for each month. If you select annual net metering, HOMER finds the net usage for each rate for the entire year. Net metering is not applicable in Real Time Rates mode.