There are two meters for your system, the solar meter and the bi-directional (NET) meter. The solar meter is typically located adjacent to the inverter and measures the cumulative total of all energy produced by your PV system since it was installed. The NET meter is the billing meter installed by your utility company. This meter measures the difference between the electricity delivered by the utility to you and the electricity received by the utility from your PV system:

Power Delivered by Utility to Your Home - Power Received by Utility from Your PV System = Total NET Usage


Electricity produced by your PV system is used first to instantly power anything needing electricity in your home. This power is not reflected on your NET meter or your utility bill. Any excess power produced by your system that is not used instantly travels through your NET meter and into the local power grid.

When you are producing more power than you are using, your NET meter numbers will go backward. When you are using more power than you are producing, your NET meter numbers will go forward.

With net metering, if your system produces more energy than you consume in a billing period, the excess kilowatt-hours (kWh) are carried forward as a credit to reduce future bills. Once a year, TEP and TRICO will buy back any credits that remain in your account as of your October billing date if you are a TEP customer or your September billing date if you are a TRICO customer. TEP and TRICO buy back credits at current wholesale rates, which are listed on their websites.

Please note: It typically takes one complete billing cycle after your system is inspected by the utility before you will see any changes reflected on your bill.

The Current State Of Net Metering

Latest UPDATE:

We wrote earlier this fall about the topic of net metering, and proposed changes by Tucson Electric Power (TEP) to the current net metering structure. Below is an update on the status of TEP's filing with the Arizona Corporation Commission (ACC), as well as an interpretation of the impacts.

TEP has recently submitted to the ACC for a new rate case which would adversely affect savings associated with solar energy, energy efficiency, or both, in four major ways:

1) Increase of a fixed charge on all customer bills from ~$10/month to ~$20/month. This would have the impact of hurting TEP customers with smaller bills. For example, TEP customers with electric bills under $100/mo would have a higher percentage of their bill go towards the base charge.

2) Increase in the cost of energy used below 1000 kwh/month and a decrease in the cost of energy above 3500 kwh/month. This would remove the encouragement for customers to conserve energy and would put the majority of the rate increase on more efficient or smaller energy users in TEP territory: for example students, elderly and other electricity customers that live in small apartments and/or use relatively little energy.  

3) Introduction of demand charges for all new solar customers and energy charges reduced by almost half, to approx. $0.06 per kwh. Demand charges are based on the highest amount of power used in any 15 minute period throughout the month and are in addition to all other charges.  In its current form this proposal would effectively prohibit most customers from installing solar, since most months solar will not reduce the demand charge, and the energy produced by solar would be worth about half of it's current value. It would also likely hasten the deployment of battery-based technologies to either allow customers to go off-grid or to shift loads from one time of day to another in order to save on energy costs. 

4) Dismantling of net metering so that any excess energy produced by solar but not instantaneously used would be credited at a solar wholesale rate, rather than the retail rates as has traditionally happened through net metering. This policy would appear redundant to the demand charge proposal described above, since the value of solar generation would be about the same as the proposed solar wholesale rate, but if the demand charge doesn't get approved by the ACC, the net metering proposal in the rate case would significantly reduce the size of solar energy systems that are economically viable for most customers, especially lower energy users who are not at home during the day to use the power as its being produced. 

Previous Changes:

As of August 2015, TEP has put in a request to the Arizona Corporation Commission (ACC) that net metering in Arizona be restructured. TEP is requesting that excess energy generated via rooftop solar and sent back to the grid be automatically converted into a dollar amount credit at a rate of $.058/kWh.

TEP's initial proposal for these changes has been withdrawn, however they are planning to resubmit the same proposal as part of a rate case later this fall. TEP has requested that proposed changes, if approved, be applied to any customer who submitted TEP paperwork after June 1, 2015, though the commission have said that they will not grant retroactive ratemaking.

Reference Materials:
AZCC Meeting video, relevant information at appx. 4:14:50
AZCC 7/20 posting docket