Want cheap electricity? Try net metering.

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Homeowners and businesses that get electricity through solar panels and wind turbines not only protect the environment by using clean energy, they have cheaper electric bills, thanks to “net metering.”

Net metering allows customers who generate some of their own energy to feed excess electricity back to the power grid. Customers are charged for the electricity they draw off the grid, typically at night when the sun is down, and they are credited for the excess wind- and solar-generated power they don’t use and thus contribute to the grid.

It works like this. An electricity meter keeps track of how much electricity from the power grid customers use. When the customer adds energy to the grid, the meter runs backward. That way, customers are only billed for their “net” energy use.

Net metering is not available everywhere, but where it is, it helps customers manage their own energy usage and save money. It also creates jobs. As distributed energy sources increase, demand for solar and wind installers and manufacturers grows.

Net metering contributes to grid efficiency because the the clean energy is distributed close to consumers, so it reduces losses from long-distance transmission, says the Solar Energy Industries Association.

In the United States, states and utility regulatory commissions are developing policies to encourage net metering.

At the state level, New York’s Reforming Energy Vision will make utility revenue practices friendlier to distributed generation users while maintaining earnings for power companies. California and other states are moving in a similar direction, taking the lead on the transition from conventional to distributed power sources.