Most homeowners understand the basic idea behind solar panels: sunlight hits the panels, the system produces electricity, and the electric bill goes down.
But what happens to that electricity after it leaves the panels? Does it go directly to the power company? Does your house buy it back later? What exactly is net metering?
The most important thing to understand is this:
The electricity produced by your solar panels is used by your house first. Only the extra electricity is sent to the power grid.
Here is how the process works.
How Do Solar Panels Produce Electricity?
Solar panels contain photovoltaic cells that convert sunlight into direct current electricity, also called DC electricity.
Most homes use alternating current electricity, or AC electricity. An inverter converts the DC electricity produced by the panels into AC electricity that your lights, appliances, heating and cooling equipment, and other electrical devices can use.
Once the electricity has been converted, it enters your home’s electrical system.
Your House Uses the Solar Energy First
Solar electricity follows the path of least resistance. When your system is producing power, that electricity is first used by whatever is running inside your house at that moment.
That could include:
- Your refrigerator
- Air conditioning
- Lights
- Computers and televisions
- A washing machine or dryer
- An electric water heater
- An electric vehicle charger
- Anything else using electricity
This is where a common misunderstanding happens. Your solar energy does not automatically get sent to the utility company as soon as it is produced. Your home gets the first opportunity to use it.
If your solar panels are producing 5 kilowatts of power and your home is using 3 kilowatts, the house will use 3 kilowatts directly from the solar system. The remaining 2 kilowatts will be sent to the grid.
You avoid buying those first 3 kilowatts from the utility because your solar panels supplied them directly.
What Happens to the Extra Solar Energy?
Solar panels often produce the most electricity during the middle of the day, when the sun is strongest. Many households are using less electricity during those hours because people are at work, school, or away from home.
When your system produces more electricity than your house needs, the excess power flows through your electric meter and onto the local power grid.
A bidirectional electric meter measures electricity moving in both directions:
- Electricity you receive from the grid
- Extra solar electricity you send to the grid
That extra solar energy can then be used by nearby homes and businesses.
What Is Net Metering?
Net metering is the billing system that gives solar homeowners credit for excess electricity sent to the grid.
Think of the grid as a place where you can send extra electricity when your panels are producing more than you need. Later, when your home needs more power than the panels are producing, you draw electricity from the grid as usual.
Your utility tracks both sides of that exchange.
During sunny periods, you may send electricity to the grid and earn credits. At night, during cloudy weather, or when your home is using a lot of electricity, you may pull power from the grid and use those credits to offset some or all of the cost.
The exact value of those credits and how they appear on your bill depend on your utility and local net-metering rules.
A Simple Net-Metering Example
Imagine your solar system produces 30 kilowatt-hours of electricity during one day.
Your home immediately uses 20 kilowatt-hours while the system is producing. Those 20 kilowatt-hours never need to come from the utility.
The remaining 10 kilowatt-hours are sent to the grid and measured by your electric meter.
Later that evening, after the sun goes down, your home uses 8 kilowatt-hours from the grid.
In a simple net-metering example, the 10 kilowatt-hours you exported would offset the 8 kilowatt-hours you later imported. You would still have 2 kilowatt-hours of credit remaining.
The actual calculation and billing period can vary by utility, but the basic idea is the same: you receive credit for the excess solar electricity your home does not use.
A Real Example of Solar Production and Net Metering
The screenshots below are of my house and cover the same 29-day period, from March 7 through April 4, 2025.
The first screenshot comes from the solar monitoring system. It shows that the solar panels produced a total of 644.6 kilowatt-hours during the billing period.
The bars show how much solar electricity the system produced each day. Taller bars represent sunnier or more productive days. Shorter bars can be caused by cloudy weather, rain, snow, shade, or other normal changes in sunlight.
The monitoring system also shows an estimated currency equivalent of $87. That is an estimate based on the electricity rate entered into the monitoring platform. It should not be treated as the exact savings shown on the utility bill.
The important number is the total production:
644.6 kWh of solar electricity produced
Why Pepco Only Shows 304 kWh of Excess Solar
The Pepco bill for the same dates shows 304 kWh of excess generation.
At first, those numbers may appear not to match:
- Solar monitoring system: 644.6 kWh produced
- Pepco bill: 304 kWh exported
The reason is simple. Pepco only measures the solar electricity that leaves the property and enters the grid.
The home used the rest of the solar electricity before it ever reached the Pepco meter.
Here is the calculation:
644.6 kWh produced − 304 kWh exported = 340.6 kWh used directly by the home
That means the home immediately consumed approximately 340.6 kWh of solar electricity while the system was producing it.
That electricity does not appear as excess generation on the Pepco bill because it was never sent to Pepco. It powered the house directly.
This is why homeowners should not compare the production number in their solar monitoring app only to the excess-generation number on the electric bill. They measure two different things.
What Happens at Night?
Solar panels do not produce electricity at night. Unless your home has a battery system, it will draw electricity from the power grid after the sun goes down.
This does not mean the solar system has stopped saving you money. The excess electricity you sent to the grid during the day may create credits that help offset the electricity you use at night.
During the day, you may be a producer of electricity. At night, you become a consumer again. Net metering helps balance those two periods on your utility bill.
What Happens on Cloudy Days?
Solar panels can still produce electricity on cloudy days, but usually not as much as they produce in direct sunlight.
If the system is producing less electricity than your house needs, your home will use all the available solar energy first. The utility grid will automatically supply the rest.
For example, if your home is using 4 kilowatts and the solar panels are producing 2 kilowatts, your home will use the full 2 kilowatts from the solar system and pull the remaining 2 kilowatts from the grid.
There is no interruption or manual switch. The process happens automatically.
Why Solar Production Does Not Always Match Your Utility Bill
Your solar monitoring system typically shows the total amount of electricity produced by your panels. Your utility meter usually measures only the electricity exchanged between your home and the grid.
That means your utility may not see all the solar electricity your home used directly.
For example, if your system produced 1,000 kilowatt-hours during the month and your home immediately used 600 of them, only the remaining 400 kilowatt-hours would be exported to the grid.
Your solar monitoring application would show 1,000 kilowatt-hours of production. Your utility account may show only the 400 kilowatt-hours that were sent back to the grid.
The other 600 kilowatt-hours still saved you money. They reduced the amount of electricity you needed to purchase from the utility in the first place.
This is one reason homeowners should not judge system performance by looking only at the export numbers on their utility bill.
Will Solar Completely Eliminate Your Electric Bill?
It depends on the size of your solar system, your energy use, available roof space, shade, local net-metering rules, and the utility’s fixed monthly charges.
Some solar systems produce enough electricity over the course of the year to offset nearly all of a home’s electricity use. Others are designed to cover only part of it.
Even when solar covers 100% of your electricity consumption, the utility may still charge fixed fees for keeping the home connected to the grid.
Your electricity use can also change after installation. Adding an electric vehicle, switching to electric heating, installing a hot tub, or using more air conditioning can increase consumption.
The Basic Flow of Solar Electricity
The easiest way to remember the process is:
- Sunlight hits the solar panels.
- The panels produce DC electricity.
- The inverter converts it into AC electricity.
- Your house uses that solar electricity first.
- Extra electricity is sent to the grid.
- Your utility meter records the excess electricity.
- Net-metering credits can offset electricity you use from the grid later.
Solar does not require you to change how you use electricity. The system automatically decides whether your home uses solar power, grid power, or a combination of both.
Have Questions About Solar or Net Metering?
Understanding where your electricity goes is an important part of deciding whether solar makes sense for your home.
At Uprise Solar, we help homeowners understand how much electricity their system is expected to produce, how much of their current usage it could offset, and how local utility rules affect their potential savings.
If you are considering solar in Washington, DC, Maryland, or Virginia, contact Uprise Solar for a personalized solar assessment.
