What Is Net Metering?

If you’ve been researching solar energy in Michigan or Virginia, you’ve probably come across the term net metering, or “net billing.” These programs play a big role in saving solar customers money, but the details can be confusing. Let’s break down net metering and net billing in simple terms so you can understand exactly how it works and how it can benefit you. Tiger Solar services central Virginia and Michigan, so we’ll also compare how the programs differ between those two states.

What Is Net Metering and How Does It Work?

Net metering is a billing arrangement that allows solar customers to receive credit for extra electricity generated by their solar systems and send it back to the grid.

During the day your panels often produce more electricity than your home uses. That excess energy flows back into the utility grid and your utility company gives you credits for that surplus power. When the sun isn’t shining, like at night or on cloudy days, you draw electricity from the grid. Those credits help offset the cost of that power, reducing your overall energy bill.

With net metering, you’re only billed for your “net” electricity use—the total you consume minus what your panels produce and send back.

How Are Credits Produced and How Are They Used?

When your solar panels generate more power than you use, your electric meter tracks that surplus. Each kilowatt-hour (kWh) you send back to the grid earns a credit at a rate set by your utility company.

Those credits apply directly to your future bills, offsetting the electricity you pull from the grid when your solar system isn’t producing enough. This setup is especially handy for balancing out seasonal energy differences, like during long, sunny summers or shorter, cloudy winters.

Do Net Metering Credits Expire?

In most cases, your credits roll over month-to-month—but the rules depend on your utility company and state.

In Virginia: According to Dominion Energy and Appalachian Power, any excess credits carry forward until your annual “PTO” date, typically in the spring. At that point, unused credits may be forfeited or purchased at a lower wholesale rate.

In Michigan: The state’s net metering program transitioned to a net billing structure called “Distributed Generation Program”. Credits are still issued, but instead of one-for-one retail value, exported energy earns a slightly lower rate based on the utility’s avoided cost or supply rate. These credits roll over each month but you’ll need to check with your utility company if they expire.

What’s the Difference Between Net Metering and Net Billing?

The key difference is how your exported energy is valued.

With net metering, your credits are worth the same retail rate you pay for electricity—essentially dollar-for-dollar savings.
With net billing, your exported electricity earns a reduced rate, typically based on the utility company’s generation costs.

In states like Michigan, where full net metering has been replaced by net billing, the savings are still substantial—but you may want to supplement your solar panels with a battery storage system to maximize the value of your energy.

If you’re wondering whether a battery system might be better for your home than relying on credits, this guide from EcoFlow explains how energy storage can boost your independence from the grid.

How Much Can You Save?

Your savings depend on your home’s energy use, your system size, and your utility company’s rates. In Virginia, where most utilities still offer true net metering, homeowners can offset a large percentage of their electric bills—sometimes up to 100% annually.

In Michigan, even under net billing, homeowners can still achieve significant savings, often reducing their electricity costs by 40–60% or more over time.

Either way, pairing solar production with grid credits (or batteries) helps protect you from rising utility rates and makes your home more energy independent.

How to Sign Up for Net Metering or Net Billing

Signing up is typically part of the solar installation process. When you work with Tiger Solar, our team handles the paperwork and coordinates directly with your utility company—whether it’s Dominion Energy or Appalachian Power in Virginia , or Xcel Energy in Michigan.

If you’re a Dominion Energy customer, you can start the process yourself with this online form, but you don’t have to go it alone. Tiger Solar can take care of it for you as part of your solar installation project.

Pros and Cons of Net Metering

Pros	Cons
Substantial utility bill savings	Credit rates and rollover rules can change by utility
Reduces the return-on-investment timeline for solar	Some states (like Michigan) no longer offer full retail-rate credits
Encourages clean, renewable energy	You remain partially dependent on your utility unless you add storage
Alleviates strain on the power grid	You must be connected to the grid

FAQs About Net Metering and Net Billing

Do all utilities in Virginia offer net metering?
Yes, most major utilities—including Dominion Energy, Appalachian Power and Rappahannock Electric Cooperative—offer residential net metering programs.

Can I participate if I have a battery system?
Yes! Batteries can store excess energy before it’s sent to the grid, allowing you to use more of your own solar power.

Does Michigan still have net metering?
Michigan transitioned from net metering to net billing in 2019, but the savings structure is similar—it just uses different credit values.

Can I still save money under net billing?
Absolutely. You may not get a one-for-one credit, but your long-term savings and reduced grid reliance still make solar an excellent investment.

How can Tiger Solar help?
Tiger Solar makes the process easy—from system design to permitting, installation, and utility coordination. We’ll ensure you’re enrolled in the right net metering or billing program so you can start saving right away.

What Is Net Metering?