What is Tesla Solar Net Metering?

What is Tesla Solar Net Metering?

One of the advantages of Tesla’s solar energy system is that it reduces your electrical bill by creating energy for your home to use. You do not have to rely on your local or regional utility company’s grid. The result is cheaper and cleaner energy. Depending on your state, it may also allow you to take advantage of the lucrative net metering.

Net metering is a system by which you can send excess energy generated by your Tesla solar panels back to your local utility company’s electric grid. The company then gives you credit toward future energy use should you ever need to access energy from the company’s grid.

Net metering (called NEM) is available to solar customers who do not use Tesla, as well. However, the program is not yet available in all U.S. states. Some states provide other forms of compensation, while others provide none at all. Read on to learn all there is to know about Tesla’s specific net metering program and how it benefits customers.

Tesla Solar Net Metering

For many homeowners in most states, net metering has been one of the traditional ways in which solar panels can save you money. Not only does your solar system create energy for you, but it acts as a minimal passive income (with strict limits on where and how you can spend it).

In fact, for those who have older meters, there is the common phrase of “watching the meter go backward.” It is meant to describe the feeling of freedom from the power grid when you first got solar. You have only to wait for your system to generate more energy than you need so you can watch it enter the grid through your meter.

For those Tesla Solar customers who live in states without NEM programs, you still have the ability to send energy back to the grid instead of taking energy from it, so long as your solar system creates excess energy. However, whether you will receive compensation and what kind of compensation you receive will vary by your state.

The benefits of a net metering program can vary not only by state but by the homeowner. There are two factors that affect how much excess energy your panels can produce:

  • How much energy your panels are able to generate
  • How much generated energy you consume

How Can a Tesla Solar System Generate More Energy Than You Need?

It is not only possible but common for your Tesla solar system to generate more energy than you need in order to power your home. Because a solar system is always receiving energy from the sun (as long as the sun is shining), it is always generating energy for you to use. Under ideal circumstances, you can generate more energy than you need.

However, circumstances are not always ideal. Your Tesla’s ability to generate more energy than you need does not mean that it can perform the impossible. Your Tesla system cannot

  • Generate energy all the time
  • Consistently generate the same amount of energy
  • Generate enough energy to power your home continually

Nevertheless, your system is capable of generating more than you need. This will be more true depending on where you live. If you live in the southwest or southern California, your system will likely generate more energy than you need more often than if you lived in northern climates. This is because the sun shines more often there.

Situations That Decrease Energy Generation

Since your Tesla solar system gets energy from the sun, it is going to generate energy during the day. This means that if you are going to gain from net metering, it is going to happen during the day. That part is easy to understand. What it also means is that your Tesla solar system will generate a range of energy depending on a few variables.

For example, there are circumstances that can decrease or drastically alter the amount of energy that your system can generate. Those circumstances include:

  • Partial overcast
  • Total overcast
  • Winter

It is easy to see why total overcast can result in decreased energy gathering. However, it is also worth noting that this can happen (albeit to a lesser degree) during partial overcasts or during winter when the sun is lower in the sky.

Summer months are better for solar energy generation, not just because there is less rain, but because there are more hours each day during which your solar panels are exposed to direct sunlight.

Energy Generation versus Energy Consumption

There is one major factor that determines whether you will benefit from net metering or not: the amount of energy you consume in your household. The more energy you consume, the less you will be able to take advantage of the net metering program. That is because your system will be less likely to produce excess energy.

Here is an example of a household that consumes a great deal of energy and, therefore, will not benefit from net metering:

  • A home’s solar panels produce 3 kWh of energy per day.
  • For whatever reason, the home uses 5 kWh of energy one day.
  • The panels do not produce enough solar energy to power the home’s energy consumption.
  • The home will have to draw energy from the electricity grid to make up for that 2 kWh.

However, say your solar panels produce 3 kWh of energy, and you only consume 2, then the excess 1 kWh goes to the grid via your utility company. Under the net metering program, that kWh would get logged as a credit to your account the next time you had to draw energy from the grid.

The big takeaway here is that the more energy you consume, the less chance you have of taking advantage of the net metering program. This is important to keep in mind because solar energy offers the opportunity to save money both as a cheaper energy source and as an incentive for energy conservation.

How Tesla Solar’s Net Metering Works with Tesla’s Powerwall

If the advantage of net metering is that the customer essentially pays for the utility company’s energy with their own energy, then how does the program benefit customers who have Tesla’s Powerwall?

Tesla’s Powerwall is a battery that can store energy either from the utility company or from the homeowner’s own solar panels or Tesla Solar Roof. So if the solar-generated energy is going to the Powerwalls, can a Tesla customer benefit from net metering?

The answer is yes, just not as much as otherwise. Since the Powerwalls store unused energy, that excess energy is not immediately going back to the grid. However, once the Powerwall has stored its max amount of excess generated energy, the rest can go back to the grid.

Does Tesla’s Powerwall Detract from Savings Through the Net Metering Program?

Ultimately, Powerwalls do limit the amount of savings you will make from the net metering program. However, you have to keep in mind the factors above as well as the fact that the Powerwall offers you savings in other ways that may be comparable to, if not more beneficial than what the net metering program offers.

Imagine that, on a long summer day, your solar panels generate 17 kWh of energy. Four of those power your home that day, and the remaining 13 kWh fill up your Powerwall for later use. You have no extra energy to send back to the grid, but you have a lot of energy in storage. If you did have any extra beyond that, it would go to the grid.

Now, pretend that, in the same example

  • You use 10 kWh to power your home on a high consumption day
  • You use 13 kWh to fill up the Powerwall
  • Your total energy used is 23 kWh

Does that mean that the remaining 6 kWh have to be pulled from the grid because you stored them? Not necessarily. By storing excess energy, you have saved it for later use. That could mean later in the same day. In this instance, the Powerwall has saved you money beyond what NEM could do.

How to Increase Your Chances for Net Metered Energy

The more efficient your solar panels are, the more energy they are going to generate from the sun. This will lead to the highest likelihood that they will produce excess energy that can go back to the grid. Simple maintenance can improve the efficiency of your solar panels.

Keeping your solar panels free of layers of dust or dirt is as easy as squirting them down with a house from the ground. Rain is sufficient for cleaning them, so rinsing them off with a hose can make a small but noticeable improvement in their ability to produce extra energy efficiently.

Which Tesla Customers Can Take Advantage of Net Metering?

Currently, Tesla offers two different ways to break into the solar world. You can:

  • Purchase solar energy by owning your system
  • Subscribe to solar energy by renting your system

The solar subscription is currently an attractive offer. It gives you the opportunity to try solar energy without committing to the relationship. But what about net metering?

Clearly, the Tesla customers who own their panels or their solar roof can benefit from net metering. It is your energy created from your system that goes back into the grid through the meter on your home. Net metering credits are clearly yours. But what about if you are only subscribing to the system?

Tesla Solar Subscribers and Net Metering

Customers who subscribe to Tesla’s solar subscription service give up their right to some of the fringe benefits of solar but get to keep others. Probably the most popular benefit of solar is the federal tax credit that has been in place since 2006. It is an incentive to get people to go solar by giving them a break in the price.

If you subscribe to Tesla’s subscription solar program, you forego your right to the federal tax credit. That money goes to Tesla since they still own the system that is on your roof. You are only renting it.

Luckily, the same does not apply to net metering benefits. Since the credits are generated at your small corner of the electrical grid and put back into the system through your meter, they are your credits to use.

Customers who rent solar panels from Tesla can still benefit from net metering. The excess energy that is created using Tesla’s solar system remains yours in every sense. Tesla does not set up a battery to capture the energy and keep it, so it goes to the power grid and is recorded as a credit on your energy bill.

Tesla Solar Net Metering in Different States

While Tesla enables their customers to take advantage of net metering, net metering is not something exclusive to Tesla. All solar companies create the opportunity for their customers to take advantage of net metering simply by virtue of establishing solar energy for their homes.

Additionally, net metering is not something that solar companies or energy utility companies manage. Net metering exists because states in America mandate it to one extent or another. Many states have mandated that utility companies allow net metering as a means of compensating customers who create excess energy through solar power.

The below states are able to use net metering through their Tesla solar energy systems and other solar energy systems.

NevadaNew HampshireNew Jersey
New MexicoNorth CarolinaNorth Dakota
PennsylvaniaRhode IslandSouth Carolina
West VirginiaWisconsinWyoming

Solar customers in Washington D.C., American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands are also able to take advantage of this program, as net metering is mandated.

States That Are Leaving Net Metering Compensation

For Tesla customers that live in the following five states, net metering is being phased out. In some of these states, net metering will be replaced with an alternative form of compensation. However, in some states, compensation will no longer be offered to solar customers who produce excess energy.

States that will switch to an alternative compensation method or do away with compensation altogether are:

  • Illinois
  • Indiana
  • Kentucky
  • Michigan
  • New York

These alternatives could come in the form of monetary replacements for kWh ratings or limit caps on net metering instead of unlimited credits.

States That Currently Mandate Compensation Other Than Net Metering

There are some states in which Tesla customers can still get compensated for the excess energy that your solar system generates, but you will not be compensated through net metering.

These states are:

  • Arizona
  • Georgia
  • Hawaii
  • Louisiana
  • Mississippi
  • Utah

States That Do Not Mandate Any Compensation

Finally, there are those states who do not mandate net metering or any other kind of compensation. So Tesla Solar customers will not be eligible for any compensation from the excess energy that their solar panels generate.

Thankfully there are only two of them:

  • Idaho
  • Texas

How to Benefit from Net Metering

Tesla Solar customers do not need to do anything to benefit from net metering. If the programs are mandated in the state in which you live, that means it is not something that you sign up for. It is something that, by law, must happen whether you sign up for it or not. You do not even have to be aware of it taking place.

The same holds true in states that have alternative mandated forms of compensation for excess energy that your solar system puts back into the grid. It does not hold true for those states that have not mandated any kind of compensation.

In that case, it depends on whether or not your utility company voluntarily gives you some kind of compensation for excess energy, including net metering, or not. Whichever is the case, as a Tesla Solar customer, you may have to initiate a conversation with your utility company to find out.


Net metering is only one of the many benefits of having a solar energy system. Unlike the one-time FTIC rebates, net metering kicks in monthly based on how well your system has produced. Simply by letting your solar system do what it was designed to do, it will create energy for your home and even excess energy that will go back to the grid.

Net metering kicks in when this excess energy goes out to the grid, and your utility company reckons it as a credit to your account. This credit is applied to your energy bill, assuming you live in a state where net metering is mandated. It is one of the remarkable advantages of solar energy. You can essentially sell energy to your utility company.

After years of dependence on the grid and those who own it, net metering is an expression of freedom that owners, as well as Tesla Solar subscribers, can benefit from. If the energy goes out through your meter, the benefits of it come back on your bill.

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The articles here on ThatTeslaChannel.com are created by Greg, a Tesla vehicle and Tesla solar expert with nearly half a decade of hands-on experience. The information on this site is fact-checked and tested in-person to ensure the best possible level of accuracy.

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