There’s lots of advice out there about how to save on your electricity bills. Turn off the lights when you leave a room, for starters. But what about making money from the electricity company instead of sending a monthly check? Yes, it’s possible.
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If you’re thinking about generating some renewable energy on your property, you should know that those solar panels can earn you money. Here’s how you can sell electricity back to the grid:
1. Check with your state and utility company
Over 40 states allow for some kind of “net metering.” Translation: households that generate electricity through residential solar projects can receive checks from the power companies for excess energy sent to the grid.
Here’s how it works: while you’re off at work during the day, the solar panels on your home generate electricity that gets stored on the grid as credits. You draw down those credits when you come home and turn on the lights, but if over time you generate more credits than you use, you can sell the credits to the power company.
The rules and rates for selling electricity to the grid vary from state to state, as well as by utility company. Some make it easier than others, and there are caps on how much each household can sell via net metering, to prevent people from fleecing the utility companies.
Recently, there’s even been a push to make it harder for folks who generate renewable energy to sell it back to the grid. Opponents of net metering argue that people who generate their own electricity should pay the utility company for the privilege of using the grid. It’s another reason to take advantage of the money-earning possibilities of net metering while you can.
2. See about tax benefits
Many states offer tax incentives to homeowners who take steps to make their homes more sustainable and energy-efficient. Thinking of installing solar panels? You can claim the federal solar tax credit and, depending on where you live, a state-level tax credit or rebate, too.
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3. Install and sell
If you want to make money by selling electricity back to the grid, you’ll have to generate more than you use. Before you embark on the installation, study your electricity bill to determine your average use. Or, have an expert conduct an energy audit on your home. Then, make sure the solar panel system you install will generate more than enough to cover your needs. That’s why it’s called “net metering.” A special meter measures net electricity generated and the utility company pays you for it. Not bad!
The Bottom Line
Nowadays, there are plenty of resources to help would-be generators of residential solar power. You can even read tell-all blogs by people who are regularly pulling checks from their utility company. There are also apps that make it easy to monitor your home energy use and production, so you can see the impact of every sunny day.
A matching tool like a matching tool like SmartAsset’s can pair you with a financial expert who can guide you through the nuances of the tax credits associated with solar panels. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to up to three registered investment advisors who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.
Photo credit: flickr