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What’s Net Metering?

Net metering is a billing mechanism that allows consumers who generate excess electricity to earn “credits” for electricity that they “sell” back to the grid. 

Note that we enclose the terms “credits” and “sell” here as your distribution utility, say MERALCO, won’t be actually paying you with money for the electricity that you have returned to the grid. Instead, your distribution utility will be giving you credits which you can use to offset the electricity that you consume from the grid during the times when your solar doesn’t generate enough energy for your needs. How much your credit will be depends on your distribution utility (DU).  The general rule is that the distribution utility will credit the customer’s energy bill with a peso credit equal to the DU’s blended generating cost, excluding additional generation adjustments.

Infographic credits. MERALCO

So at the end of each month, a homeowner enrolled in the net metering scheme will be only billed for the “net” electricity used every month. The earned peso credits will be then subsequently applied to your electricity bills.

The most obvious benefit of net metering is the reduced electricity costs. If your home solar PV is generating more than you consume, you might even receive a zero bill (nice!). Your credits also add up and can be used for the succeeding months. Think of saving up your credits for use during the rainy days. In addition, you are helping reduce the burden from the grid especially during peak summer months.

Ok I’m sold! So how do I sign up for net metering?

Per DOE regulations, all distribution utilities should be capable of handling net metering connections from their customers. Exact procedures vary per distribution utility, but in general this includes submission of a lot of paperwork, such as design plans, permits and approvals, inspections and installation of a bidirectional meter and an Renewable Energy Certificate (REC) meter. The bidirectional meter, as the name implies, measures the electricity from the grid going into your home and the electricity that you send back to the grid from your home PV system. The REC meter is a new addition based on the amended regulations but aside from compliance, the readings from the REC meter will be used to determine additional subsidies and discounts that will be applied to your bill.

To give you an idea, we’ll be sharing here the general process from MERALCO, the country’s largest distribution utility company.

Due to the safety and hazard risks associated with any electrical installation, application for net metering requires meticulous review and from first-hand reports, it may take around 3 months. Due to this, many solar EPCs include net metering processing as a value-add service that they offer to their customers. Yuda has a roster of certified installers and suppliers that can provide you with net metering support, so that you can skip all the trouble and leave it to the experts. How convenient is that! 

Are you a homeowner who just recently installed a solar PV system in your home? We are looking for individuals like you to be featured in our blog! Share your post-installation experience by emailing us at

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