Net Metering Savings Calculator
Calculate your monthly solar bill savings under net metering by comparing what you avoid paying in retail electricity costs against any export credits and fixed fees. Use it when evaluating how self-consumption versus grid export affects your payback period.
About this calculator
Net metering allows solar owners to send surplus electricity back to the grid and receive a credit, but self-consumed solar is typically worth more because it offsets electricity at the full retail rate. The formula captures this two-part value: Savings = min(production, usage) × retailRate + max(0, production − usage) × netMeteringRate − connectionFee. The first term values every kWh your panels produce that you consume directly — each unit avoided is worth the full retail price you would have paid. The second term values surplus kWh exported to the grid, credited at the (often lower) net metering rate set by your utility. Finally, fixed monthly connection fees are subtracted, since those costs continue regardless of solar output. The result is floored at zero, as net metering programs generally don't pay cash for over-credits in the same month.
How to use
Assume 600 kWh monthly production, 500 kWh monthly usage, a $0.14/kWh retail rate, a $0.08/kWh net metering credit rate, and a $10 monthly connection fee. Step 1 — self-consumed energy: min(600, 500) = 500 kWh × $0.14 = $70.00. Step 2 — exported surplus: max(0, 600 − 500) = 100 kWh × $0.08 = $8.00. Step 3 — subtract connection fee: $70.00 + $8.00 − $10.00 = $68.00 monthly savings. Over 12 months that equals roughly $816 per year in avoided costs.
Frequently asked questions
What is the difference between retail rate and net metering credit rate?
The retail rate is what you pay your utility per kWh you consume from the grid — it includes generation, transmission, distribution, and various taxes or fees. The net metering credit rate is what your utility pays (or credits) you per kWh you export back to the grid, and it is almost always lower than the retail rate. Many utilities set the export credit at the wholesale or "avoided cost" rate, which can be 30–60% below the retail price. This difference is why maximizing self-consumption — using solar power directly in your home rather than exporting it — typically delivers a better financial return than over-sizing a system to produce large surpluses.
How does a monthly connection fee affect net metering savings?
Fixed connection fees (sometimes called customer charges or service charges) are billed regardless of how much electricity you use or produce, so they directly reduce your net savings. A $15/month fee costs $180/year that solar alone cannot eliminate. In some states, utilities have increased these fees specifically because solar customers reduce their volumetric consumption. When evaluating solar payback, it is important to include connection fees in your analysis rather than assuming your bill can drop to zero — in most cases a small fixed charge will remain.
When does net metering stop being beneficial for solar owners?
Net metering value erodes when export credit rates are set very low (below $0.05/kWh), when monthly caps limit how many kWh can be credited, or when utilities shift to "net billing" programs that compensate exports at wholesale rather than retail prices. California's NEM 3.0, for instance, cut export rates dramatically, shifting the economics firmly toward battery storage and daytime self-consumption. If you produce far more than you consume, the surplus exported at a low rate adds little value. Right-sizing your system to your actual consumption, and pairing it with a battery if export rates are poor, tends to maximize the financial benefit of going solar.