In place in several states throughout the country, net metering allows solar homeowners to pay only for the net amount of power they actually take from the APS grid. Sometimes solar produces more than is needed and other times it produces less. Net metering means you will pay only for what you actually need to buy from APS.
It seems like common sense because it is. This is grid-tied solar. The technology was designed to work exactly this way. In fact, it is because of universal policies like net metering that solar technology functions as it does.
As we all know, solar only produces power during the day when the sun is shining. At night we need power from some other source. In rural areas, this need has been met with batteries. Our solar panels produce more power than we need such that we can charge our batteries and use that stored power at night. But batteries are still cost-prohibitive on a large scale. Until the cost of battery storage comes down, we need a more affordable method of integrating clean renewable energy into our lives.
Good news: we already have the method and it has worked incredibly well for years. Grid-tied solar does not have batteries. We use the grid as our battery pack. The extra power we produce during the day travels back to the grid and powers neighboring homes and buildings, significantly reducing stress on the grid and the costs and inefficiencies of transmission from power plants.
But it would not make sense for us simply to give that power away or even sell it back at wholesale rates. APS sells it to our neighbors for a profit without any effort at all. APS and many utilities around the country knew this would have been a bad deal for solar homeowners, but they needed solar on the grid in a hurry. The Arizona Corporation Commission mandated a Renewable Energy Standard requiring a certain percentage of power be renewable energy-based.
For that reason solar has been a necessary evil in the eyes of APS. The more solar produced by homeowners, the less revenue to APS. But they needed solar and thus a way of compensating customers fairly for the power they produce. This is where net metering comes in. Now, solar homeowners who temporarily send extra power back to the grid can take it back just like they would from a battery pack.
Both solar homeowners and non-solar customers pay the same kWh price for the power they consume.