Can I sell my excess solar energy to the utility?
Generally, yes. In most cases, your solar panel system is “grid-tied,” meaning that it is connected to your utility. Suppose your home solar system is producing more electricity than you are currently using in your home. In that case, the excess electricity flows back through your electrical panel and into the utility grid, where others can use it. In this scenario, you are selling the excess electricity produced by your solar panel system back to your utility. Utility policies regarding how you’re compensated for extra solar energy which you export back into their grid can vary widely.
Many utilities have net energy metering (NEM) policies which require that the power company compensate homeowners at the full retail rate (the price that you pay for electricity from the utility) for solar energy exported back into the grid. This means that, for any given month, the net energy you export is subtracted from the net energy you import. If more power is exported than imported, a credit is generated. That credit can be carried forward and used in subsequent months where you consume more than you produce. However, most net energy metering policies also specify how long credits can be carried forward. At the end of an annual billing cycle, some utility companies may pay you for accumulated credits, but in some cases, those credits are forfeited.
If you lose credits at the end of your billing cycle, you’re basically giving that energy to the utility provider for free. You’ll want to understand your power company’s net metering and other home solar policies. But you’ll also want to make sure your home solar system is properly designed so that the energy produced by the system is matched to your expected energy consumption. All too often, solar contractors will attempt to sell the largest system possible to increase their revenue and profit.