Net-metering is a simplified method of metering the energy consumed and produced at a home or business that has its own renewable energy generator, such as a wind turbine. Under net metering, excess electricity produced by the wind turbine will spin the existing home or business electricity meter backwards, effectively banking the electricity until it is needed by the customer. This provides the customer with full retail value for all the electricity produced.

Under existing federal law (PURPA, Section 210) utility customers can use the electricity they generate with a wind turbine to supply their own lights and appliances, offsetting electricity they would otherwise have to purchase from the utility at the retail price. But if the customer produces any excess electricity (beyond what is needed to meet the customer’s own needs) and net metering is not allowed, the utility purchases that excess electricity at the wholesale or ‘avoided cost’ price, which is much lower than the retail price. The excess energy is metered using an additional meter that must be installed at the customer’s expense. Net metering simplifies this arrangement by allowing the customer to use any excess electricity to offset electricity used at other times during the billing period. In other words, the customer is billed only for the net energy consumed during the billing period.