If you’re contemplating whether or not to sell solar energy, let me assure you, it’s a decision worth considering. The sustainable and eco-friendly nature of this renewable energy source makes it an attractive way to earn passive income. However, selling solar energy involves understanding various aspects and requirements.
Here, we’ll explore a few key points that can guide your journey to sell solar energy:
- Can You Make Money Selling Solar Energy? There’s potential to profit from your solar energy system by selling excess power back to the grid.
- Size of Your Solar Energy System: The size of your solar energy system plays a crucial role in the amount of power generated and subsequently sold.
- Understanding Net Metering: This is a billing agreement that allows homeowners with solar power systems to receive credit for excess electricity returned to the grid.
- Selling Power Back To The Grid: A great benefit of residential solar power is the potential to sell unused energy back to your utility company, generating income.
- Checking Eligibility with State and Utility Company: It is necessary to confirm with your local authorities and utility providers about your eligibility to sell surplus power.
The practice of selling solar energy is not only financially beneficial but also promotes environmental sustainability.
Contents
- Can You Make Money Selling Solar Energy?
- Size of Your Solar Energy System
- What is Net Metering?
- Benefits of Selling Solar Power Back To The Grid
- How to Sell Electricity Back to the Grid
- Check With Your State and Utility Company for Eligibility
- Tax Benefits of Selling Electricity
- Why are some US states phasing out the Net Metering Program?
- Solar Energy Profitability
The Journey Of Selling Solar Energy
Diving into the world of solar energy selling requires you to understand the beneficial tax implications as well.
A number of states offer tax credits for homeowners who install solar panels.
However, you should be aware that some US states are phasing out the net metering program due to various reasons such as financial sustainability of electric utilities.
In conclusion, selling solar energy can be a profitable venture, but it’s important to be informed about the nuances of the industry.
Can You Make Money Selling Solar Energy?

Solar energy isn’t a direct income source. Rather, it provides significant savings and credits by slashing or eliminating your electricity bill.
It’s a misconception that average solar system investors profit from selling electricity back to property owners, which is more achievable for large solar developers.
In most states, utilities are required by law to observe net metering or net billing.
- Solar systems produce more electricity than a property may use during the day, with the excess uploaded back to the grid.
- Utility companies track and credit this contributed electricity for future use during non-production times, i.e., nighttime or cloudy days.
SRECs, generated through the Renewable Portfolio Standards program, aren’t exactly selling the electricity but its ‘greenness’.
The price of SRECs fluctuates over time and by location, depending on supply and demand in the market.
While you can’t build a sizeable solar system to sell SRECs for an income, any money earned can offset transmission costs from utility companies.
- Utility companies limit your solar system’s size, typically allowing enough power generation only to offset your property’s usage.
- Selling SRECs provides passive income, but the main financial benefits come from reducing your electricity bill, not from direct earnings.
Essentially, while solar energy can generate some passive income through SREC sales, it primarily offers financial advantage by decreasing your electric bill.
Size of Your Solar Energy System

Understanding your solar energy system’s size begins with the panels. A residential solar panel typically stands as tall as an adult, with a width resembling a baseball bat.
Such a panel comprises about 60 solar cells and measures approximately 5.5 feet long and 3 feet wide. With weights ranging from 40 to 50 pounds, they are designed for home use.
Commercial panels, on the other hand, are notably bigger than residential ones. Averaging at 6.5 feet by 3 feet, they accommodate larger energy needs.
The idea is to install high-efficiency panels whenever possible to reduce the number required. This strategy lightens your roof’s total load and increases efficiency.
“Installing high-efficiency solar panels can reduce the number of panels needed, which lightens the total load on your roof.”
There are instances where the Maxeon 6, which outputs 440 W of power, fits the bill. This panel measures about 6.14 ft x 3.4 ft, making it suitable for a 10 kW system with just 19 panels.
In other scenarios, the smaller Maxeon 3 might be better suited. Though it only outputs 405 W of power, this panel also fits within a 10 kW system but requires 21 panels due to its smaller size of 5.9 ft x 3.4 ft.
The choice between these options often comes down to personal preference and specific energy requirements.
What is Net Metering?

Net metering is an essential process that benefits both solar energy system owners and the wider grid. This billing mechanism credits owners for surplus electricity they contribute to the grid.
If you have a solar system installed on your roof, for instance, it could generate more electricity than you use during daylight hours. With net metering, any excess power is exported to the grid, and your electricity meter counts backwards, offering you a credit.
In effect, you’re only billed for your ‘net’ energy usage. This setup means that on average, only 20-40% of a solar energy system’s output ever goes into the grid. The remaining energy serves your immediate needs or those of nearby customers.
- Job creation: Increased demand for solar energy leads to job opportunities for installers, electricians, and manufacturers in the solar supply chain.
- Economic growth: As an emerging sector, solar power contributes to income and investment in several economies.
- Demand management: Net metering can help utilities manage peak electricity loads more efficiently.
- Benefits to distribution: Encouraging generation close to consumption points reduces strain on distribution systems and lessens losses in long-distance electricity transmission.
You can support net metering policies by advocating for solar energy – every voice counts! If you want to learn more about how net metering works with solar, resources like SEIA’s guide offer comprehensive insights.
Around 34 states alongside Washington, D.C., and Puerto Rico currently have mandatory net metering rules. These policies can create a smoother demand curve for electricity, which benefits everyone.
Unfortunately, some utilities view net metering policies as missed opportunities for revenue. In contrast, these policies are ways to increase efficiency in our energy systems, demonstrating the value solar offers to local economies and the electricity system.
Benefits of Selling Solar Power Back To The Grid

What future does the grid hold?
Imagine a future where homes not only use solar energy for their needs, but also store excess power.
These homes could have batteries performing energy arbitrage and time-of-use shifting.
Could there be financial advantages in such a future?
You might find many financial benefits here. Thousands can be saved each year from reduced demand charges.
Selling surplus electricity back to the grid can also contribute to these savings.
What would widespread adoption of storage mean?
In a decade, macro-level tailwinds could drive widespread adoption of power storage. This could change the face of the grid.
Homes with combined solar and storage could contribute significantly to this transformation.
How does selling solar power back to the grid benefit the environment?
This practice not only leads to savings but also reduces dependence on fossil fuels.
By feeding excess electricity back into the grid, we reduce our carbon footprint and help preserve our planet.
Is such an energy model feasible?
Yes, it is not only possible but inevitable. The benefits far outweigh any initial costs of setting up such a system.
How to Sell Electricity Back to the Grid

Selling excess electricity can be beneficial. It’s not only friendly to your pocket, but to the environment as well.
The foremost step is investing in solar panels for your rooftop. This lets you harness solar energy.
Next up, you need some machinery. An inverter comes into play here. It transforms harnessed solar energy into useable electricity.
Having a two-way meter is crucial. It records the amount of electricity produced and used.
Steps |
---|
Get Solar Panels |
Invest in an Inverter |
Install a Two-way Meter |
Sell Excess Electricity |
The table above succinctly outlines the process of selling electricity back to the grid.
In some places, this excess power can be sold to the grid. TNB is one such power company that buys extra energy.
You receive deductions from your electricity bill against this power sold to them.
This way, you’re not only saving on bills but also promoting green living by reducing carbon emissions.
Check With Your State and Utility Company for Eligibility

Establishing eligibility for renewable energy incentives starts with your utility company and state.
- Utilize Online Resources: Use online tools to check eligibility, such as the Database of State Incentives for Renewables & Efficiency (DSIRE).
- Engage APIs: APIs like `http://programs.dsireusa.org/api/v1/getprograms/xml` are beneficial.
- Cross-Check Summary Tables: These provide an overview of incentives across the U.S.
- Browse Website Databases: DSIRE, managed by North Carolina State University, offers a comprehensive view of available incentives.
Ensure you understand both state-specific summaries and program profiles to assess all possible benefits.
To get the most out of these resources, it’s critical to make use of features like dynamic maps, interactive policy maps, and enhanced zip code search.
Above all, maintain vigilance for updates on new programs. Subscribe to feeds provided by platforms like DSIRE ensures you will not miss out on any opportunity.
In addition, look into specific program details that include location-based incentives, application specifics, and technology requirements.
Tax Benefits of Selling Electricity

Investing in renewable energy brings some notable tax advantages. Harnessing the sun’s power is not just eco-friendly, it can be financially beneficial too.
Among various clean energy options, solar power is a popular choice. Wind, geothermal, biomass, battery storage and fuel cells are the other alternatives.
The Residential Clean Energy Credit
This is an initiative by the IRS to encourage homeowners to switch to renewable energy. It provides certain tax credits for making the change.
To be eligible for these credits, there are specific criteria that need to be met, outlined in depth by the IRS.
Your investment must be towards qualified renewable energy equipment installed in a property you own within the United States.
Claiming Your Credit
To claim your Residential Clean Energy Credit, follow the guidelines by the IRS. It requires specific documentation and forms for processing.
Accurately filing these forms ensures your claim will be processed smoothly, promising a significant reduction in your tax liability at year end.
This initiative rewards those making strides towards a more sustainable world with financial incentives. It’s a positive step for both the environment and your bank account.
Why are some US states phasing out the Net Metering Program?

The shift from net metering, in states like Michigan, is primarily driven by utility companies’ concerns about solar’s financial benefits.
With roughly 1.8 million US households adopting rooftop solar systems since 2010, utilities are preparing for future impacts of increased adoption on the electricity system.
Yet, rooftop solar energy still only contributes a small share to total electricity output, accounting for just 0.7% in 2019 despite its rapid growth.
The changes in net metering have led both consumers and solar installers to adapt to new economic factors surrounding rooftop solar.
For instance, Kentucky’s law decreases rates paid for rooftop solar leading regulators to set new rates.
In contrast, Nevada initially reduced rates in 2015, but restored the old rates after significant customer backlash.
Maine also revised its stance, restoring old rules after reducing solar rates in 2017 following a change in government leadership.
Arkansas has rapidly opened the market to potential solar users by legalizing solar leasing for businesses and individuals unable to afford outright purchase of solar systems.
Similarly, South Carolina has lifted a cap on new rooftop systems eligible for full retail net metering—thus promoting more home-based energy production.
Solar Energy Profitability
Yes, you can indeed sell excess solar energy back to the power company, a process known as ‘net metering’. Most utility companies offer this option, allowing you to earn credits or revenue for surplus power produced. This not only reduces your monthly bills but also contributes to a sustainable energy ecosystem. Always check with local regulations and utility policies.