
GRID-TIED SYSTEMS
Modern grid-tied inverters let you keep the reliability of the utility, but allow you to produce your own, pollution-free energy with renewables.
While many of us fantasize about freeing ourselves from a lifetime of utility bills, the reality is that the grid is usually reliable and accessible. Most of us are already on-grid, so taking our homes off-grid doesn't make much environmental or economic sense.
Batteryless grid-tied systems are also known as on-grid, utility-interactive, grid-intertied, or grid-direct. They generate solar electricity and route it to the loads and to the electric utility grid, offsetting a home's or business's electricity usage.
Living with a grid connected solar electric system is no different than living with utility electricity, except that some or all of the electricity you use comes from the sun. The drawback of these batteryless systems is that they provide no outage protection when the utility grid fails.
The inverters on these types of systems actively "test" the grid and make operating decisions based on grid conditions. These inverters need the grid present to operate (except when they are installed in an AC coupled system). While "testing" if the grid voltage or frequency goes outside UL1741 specifications, the inverter immediately disconnects itself from the house electrical system and from the grid. This process is extremely quick and therefore, the inverter will recognize the problem and disconnect itself. Once the grid is within specification again for five continuous minutes, the inverter reconnects and resumes operation.

Grid-tied systems are based on the principal of net metering, which allows homeowners to sell clean power to the utility or obtain a credit on their account when their system produces a surplus and to draw on utility power when it's needed. Grid-tied systems typically have no battery backup, making them less complicated to install and operate. Even though homeowners remain tethered to their local utilities, they don't have to worry about running short of power or about calculating precisely how much electricity they will consume.
With an off-the-grid system, every amount of energy counts, not only how much power the system can produce, but also in how the electricity is allocated. If the electrical load is greater than the PV modules can produce, power is drawn from a bank of batteries, an expensive and integral part of an off-the-grid system.
With grid-tied systems the utility grid becomes a means of "storing" your excess of electricity and acts as a backup, supplying electricity any time your demand exceeds the output of your system.
Anytime the sun is shining your solar system provides electricity to your home. If the system produces more electricity than you're using, the surplus flows onto the utility lines that supply your home, making your meter run backwards. The monetary value of the energy is counted and accumulates as credit, which can be used when the loads are higher and the PV system output is lower or at zero, such as at night or during cloudy weather. The utility meter on your home keeps track of any electricity you feed back onto the grid, as well as what you use. This is calculated depending on net metering regulations where you live.
It is possible to produce enough electricity from your grid-tied system that you get a credit from your utility company instead of a bill. This is what is called a Net Zero home. Most utilities allow credits to be carried over from month to month, which allows homeowners to draw on summer's "banked" electricity during the winter months, when system production tends to be lower.
According to the Solar Energy Industries Association (SEIA), in a typical residential net-metered solar installation, only 20% to 40% of the energy produced by the PV system is exported to the grid--most of the energy produced is used directly in the home. Customers are only billed for their net energy use--that is, the electricity they use at home beyond their PV system's production and beyond any accrued credits. Surplus PV electricity is usually consumed close by, reducing the load on the utility grid, reducing transmission and distribution losses, and reducing emissions and pollution from power plants.

Recent Changes to Arkansas Net Metering Rules
In a perfect world, your home's solar system would precisely meet your electricity demands – nothing more and nothing less. There will be days when your panels produce more electricity than you use (sunny summer days) and days when they won't produce enough (shorter, cloudier days and nights). When this happens, net metering and net billing allow you to use the grid as a type of storage battery, exchanging credit on your bill for the excess energy your panels transfer to the grid. When your solar system can't meet your energy needs, and you need to pull electricity from the grid, you can use these credits to compensate.
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Net metering
You receive bill credits with net metering, but it's not usually a monetary exchange. Instead, the credits you gain from net metering are "banked" and used when you need to pull electricity from the grid on a cloudy day. Net metering credits can be rolled over monthly and are usually a one-to-one exchange; your solar panels' kilowatt-hour (kWh) is worth the same as a grid-produced kWh. This simplifies your energy bill as you're only billed for your net energy use, or your energy consumption minus your energy production.
Net metering programs are an excellent way for solar owners to "store" the energy their solar panels produce. The one-to-one model of net metering makes home solar systems more valuable. However, utility companies argue that because retail prices reflect business expenses in addition to the value of electricity, net metering credits are equal to more than the value of electricity and delivery.
As a result, the Arkansas Public Service Commission and utility companies made changes to the Arkansas Net Metering rules that began on September 30, 2024.
These changes will not affect current or "Legacy" net metering customers as they are "Grandfathered" in with their original net metering contract until June 2040.
After June 2040, all net metered accounts will be converted to non-legacy net metering and compensated at wholesale rates.
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Net billing ( non-legacy )
Instead of "banking" the credits earned from the excess energy generated by your solar panels, net billing programs allow you to "sell" that energy to the utility, typically at the wholesale rate. Net billing is a monetary exchange in which the energy generated by your home solar system is treated like that of a large-scale solar project. However, your compensation rate will typically be lower with net billing than with net metering.
As a result, any new customers seeking to install a "Grid Tied" solar system after September 30th, 2024, will be placed on "Net Billing" status and compensated for the excess kWh solar production at the "Avoided Cost" of their utility company.
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Key Points of Net Metering vs Net Billing
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Net metering and net billing programs use overproduced electricity from home solar systems by transferring the excess energy to the grid. You receive credits for this energy you send to the grid in exchange.
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Net metering transactions are usually one-to-one, so the credits are often equal to the retail rate of electricity (aka what you pay).
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Net billing credits are often equal to the wholesale rate of electricity (aka what your utility pays for the electricity they deliver to you), which is less than the retail rate.
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Utilities tend to oppose net metering programs, so alternative compensation programs are becoming increasingly popular.
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A growing number of customers are choosing to install solar energy systems that include battery storage, opting to program these systems for "Self-consumption." This approach allows them to utilize the energy they produce for their own needs rather than entering into traditional net metering agreements. By prioritizing "Self-consumption," they can effectively reduce their reliance on the grid, lower their electricity bills, and gain a dependable source of backup power during instances of utility outages. This shift reflects a broader trend toward energy independence and sustainability, as consumers seek to maximize the benefits of renewable energy technology.
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