Net Billing vs. Net Metering: What Commercial Customers Need to Know

Introduction

As solar policies evolve across the U.S., many states are shifting from traditional net metering to new models like net billing or time-of-use compensation. For commercial property owners and businesses, understanding the difference is critical to accurately modeling ROI and energy savings. In 2025, choosing when and how to consume or export your solar energy can be just as important as installing the system itself.

What Is Net Metering?

Net metering is the legacy model in which solar customers receive a one-to-one retail credit for excess electricity exported to the grid. In simple terms:

• If your building exports 1 kWh of electricity, you get credited the full retail rate (e.g., $0.12)

• Credits roll over and offset future electricity bills

• It works like a virtual battery—store value on the grid, use it later

Net metering has long been the gold standard for maximizing solar value.

What Is Net Billing?

Net billing is the new wave of solar compensation, especially in states like California (NEM 3.0), Arizona, and North Carolina. Key differences:

• Customers still export excess solar energy, but are paid at a lower rate—often wholesale or avoided-cost rates (e.g., $0.03–$0.05/kWh)

• Solar exports don’t offset retail usage one-to-one

• On-site consumption becomes more valuable than exporting to the grid

• Time-of-use rates and smart export windows matter more

Net billing reduces the value of exported energy, increasing the importance of load shifting, battery storage, and smart controls.

Why the Shift Is Happening

Regulators argue that:

• Net metering overcompensates solar owners and shifts grid costs to non-solar customers

• Utilities need flexibility to handle midday oversupply from solar exports

• Encouraging on-site usage (rather than export) creates a more balanced grid

While controversial, the shift is becoming common across markets.

Impacts on Commercial Solar Economics

Under net billing, project financials are affected by:

• Lower compensation for exports, which lengthens payback periods

• Greater emphasis on self-consumption or storage for time-shifting energy

• Need for sophisticated monitoring to align usage with generation

• Opportunities to save more by reducing demand charges or optimizing load timing

In some states, battery storage can recapture lost value and make projects pencil again.

How to Maximize Solar Value Under Net Billing

To thrive in a net billing world, commercial solar customers should:

• Install energy storage to use solar when utility rates are highest

• Time heavy loads (EV charging, HVAC, refrigeration) for peak solar production

• Use energy management systems to automate consumption behavior

• Choose battery-ready solar systems for future flexibility

• Leverage incentives for storage, demand response, and time-of-use optimization

Designing around self-consumption is the new standard.

How Surge Helps You Navigate Policy Shifts

Surge stays ahead of utility and state-level changes so you don’t have to. We:

• Analyze your tariff, load profile, and time-of-use rates

• Recommend system sizes and designs that minimize exported energy

• Integrate smart inverters and storage when beneficial

• Model savings under both net metering and net billing

• Support applications for applicable incentives and rebates

We ensure your solar investment remains profitable and future-proof.

TL;DR Summary

• Net billing pays less for exported solar than net metering, shifting the economics of solar in many states

• Businesses must prioritize self-consumption, storage, and load management to maximize value

• Surge designs systems that align with evolving policies, so your project delivers predictable returns in any market