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Unused credits expire December 31. You don't get paid for excess; the credits simply vanish. This is why right-sizing your system is important. Oversized systems waste summer credits. Some utilities allow small credits to roll forward to January; verify your utility's specific policy.
Net Metering in Ohio: How Solar Customers Can Offset Energy Costs
Ohio net metering allows solar customers to send excess power back to the grid and receive credit against their electricity costs. This powerful mechanism transforms residential and business solar into powerful bill-reduction tools. Understanding how net metering works and optimizing your solar system around it maximizes financial benefits.
Decoding Ohio Net Metering: The Ultimate Guide to Slashing Your Energy Bill
Net metering is deceptively simple: your meter runs backward when you generate more power than you use. Credits for that excess power reduce what you owe your utility or supplier. Understanding the mechanics ensures you maximize benefits.
How Net Metering Works
- Daytime: Your solar panels generate power. You use what you need; excess goes to the grid.
- Your meter runs backward: For every kWh you send to the grid, your meter spins backward, creating credit.
- Evening/Cloudy days: You draw power from the grid. Your meter spins forward, consuming credits you've accumulated.
- Monthly settlement: Utility calculates net usage (usage minus generation). You pay or get credited based on net position.
- Annual true-up: At year-end, unused credits may be forfeited or rolled to next year depending on your utility and contract.
For a well-sized solar system, annual generation roughly equals annual consumption. Your net bill approaches zero—you essentially get free power while maintaining grid connection for cloudy days and nighttime usage.
| Utility | Net Metering Available? | Credit Value | Annual Carryover |
|---|---|---|---|
| AEP Ohio | Yes (1 MW limit) | Retail rate (your regular rate) | Rolls forward; forfeited Dec 31 |
| Duke Energy | Yes (1 MW limit) | Retail rate (your regular rate) | Rolls forward; forfeited Dec 31 |
| FirstEnergy | Yes (1 MW limit) | Retail rate (your regular rate) | Rolls forward; forfeited Dec 31 |
Important: Credits expire December 31 annually. Unused credits are forfeited. This creates incentive to right-size your solar system to match annual consumption, avoiding summer surpluses that waste credits.
Watch Your Meter Spin Backward: How Solar Credits Actually Work in Ohio
Net metering is straightforward in practice, but understanding the mechanics helps optimize your system.
Residential Example: Summer Month
You have a 6 kW solar system. June usage is 800 kWh; your system generates 950 kWh.
- Generation: +950 kWh
- Usage: -800 kWh
- Net: +150 kWh credit
- Credit value: 150 kWh × $0.12/kWh = $18 credit (rolls to July)
Winter Month
December usage is 1,200 kWh; your system generates 500 kWh (shorter days, lower sun angle).
- Generation: +500 kWh
- Usage: -1,200 kWh
- Net: -700 kWh need
- Cost: 700 kWh × $0.12/kWh = $84 (after using June's $18 credit)
Annual Calculation
Well-sized systems generate approximately equal to annual consumption. After accounting for monthly fluctuations and annual true-up, net bill approaches zero.
Example: 9,000 kWh annual generation × $0.12/kWh = $1,080 annual solar generation benefit (offset against grid purchases)
Business Advantage: Demand Charge Reduction
For commercial customers, solar reduces peak demand during sunny afternoons when demand charges peak. Reducing demand by 50 kW during peak hours saves $8,000-12,000 annually in demand charges alone—often more valuable than net metering credits!
Ohio's Net Metering Rules: A Utility-by-Utility Breakdown (AEP, Duke & FirstEnergy)
Net metering rules vary by utility. Knowing your specific utility's rules optimizes your solar investment.
AEP Ohio Net Metering
System Size Limit: 1 MW (1,000 kW) for residential and small commercial
Credit Rate: Your retail electricity rate (includes all charges)
Monthly Settlement: Net usage calculated monthly; credits roll forward
Annual True-up: Unused credits forfeited December 31 each year
Notable: Very favorable terms; retail rate crediting is best-case scenario for solar ROI
Duke Energy Net Metering
System Size Limit: 1 MW (1,000 kW)
Credit Rate: Retail rate; includes energy, delivery, and other charges
Monthly Settlement: Net calculation monthly; credits accumulate
Annual True-up: Credits forfeited at December 31
Notable: Comparable to AEP; favorable for solar economics
FirstEnergy Net Metering
System Size Limit: 1 MW (1,000 kW)
Credit Rate: Retail rate (your full electricity rate)
Monthly Settlement: Net usage calculated and settled monthly
Annual True-up: Unused credits expire December 31
Notable: Aligned with AEP and Duke; good net metering environment in Ohio
Competitive Supplier Considerations
If you use a competitive supplier instead of your utility, net metering terms may differ. Some suppliers participate in retail net metering; others don't. Clarify net metering treatment with your supplier before signing solar contracts.
Ohio's net metering environment is among the best in the nation. Retail rate crediting combined with 1 MW system size limits create excellent solar ROI economics. Compare this to states with wholesale-rate crediting (much lower) or net metering caps that limit participation.
Ready to Zero Out Your Bill? Your 3-Step Action Plan for Ohio Net Metering
If you're considering solar and want to maximize net metering benefits, follow this strategic approach.
Step 1: Reduce Consumption First
Before sizing solar, implement efficiency improvements. LED lighting, HVAC optimization, and equipment upgrades reduce consumption, requiring smaller (cheaper) solar systems. A 20% efficiency improvement means 20% less solar needed—saving $10,000-20,000 on system cost.
Step 2: Right-Size Your Solar System
Size your system to generate approximately 100% of your annual usage. Over-sizing wastes summer credits. Under-sizing limits benefits. Work with your solar installer to model annual generation vs. usage patterns for your specific location.
Step 3: Switch to Competitive Supplier (If Applicable)
Solar savings are maximized with lower underlying electricity rates. Pair solar with a competitive supplier at lower rates. Every $0.01/kWh reduction in rate multiplied by your solar generation creates additional savings.
Example: 10,000 kWh annual solar × $0.02/kWh rate reduction = $200 additional annual benefit
Bonus: Add Battery Storage (Future)
Battery systems store solar energy for evening use instead of sending to grid for credits. While not yet economically optimal for most Ohio homes (cost/benefit equation), costs are falling. Battery storage is becoming cost-competitive for business applications with commercial rates.
Financial Modeling Your Solar Investment
A typical residential solar system (6-8 kW) costs $12,000-18,000 after federal 30% tax credit. In Ohio, this generates annual benefits of $1,000-1,500 through net metering. Payback period: 8-12 years. Additional benefits include home value increase (+$4 per $1 of solar benefit capitalized) and protection from future rate increases.
Common Net Metering Questions
The utility still provides net metering (they own the grid and meter). However, your competitive supplier may have different treatment of solar credits. Clarify before signing contracts. Some suppliers offer net metering support; others require special arrangements. It's an important question to ask upfront.
Yes, as long as total system size stays under 1 MW. However, most homeowners and small businesses have systems well under the 1 MW limit. Adding panels later is possible but often less cost-effective than installing larger system initially due to economies of scale.
Ohio law currently protects net metering through 2026. However, utilities periodically petition to reduce or eliminate net metering benefits. Stay informed about utility rate cases and policy discussions. Support from solar advocates helps protect net metering policies.
Credits typically apply going forward monthly. If you generate 100 kWh in May and use 80 kWh, you carry forward a $12 credit (at $0.12/kWh). That credit applies to June's bill. It doesn't reach back to retroactively reduce past bills.
Explore Your Solar and Net Metering Potential
Net metering combined with solar creates powerful bill-reduction opportunities in Ohio. Start with an energy audit to identify efficiency opportunities, then model solar ROI with net metering benefits included.
Understand your solar potential and net metering benefits.