There are many ways to save on your electricity bills. For starters, you can turn off the lights when you leave a room. But did you know that you can also make money from the electric company? This involves selling electricity back to the company’s grid, if you have excess from your renewable energy source. So if you’re thinking about generating renewable energy on your property, those solar panels can earn you money.
A financial advisor can help your savings grow by creating a financial plan for your needs and goals.
Check With Your State and Utility Company for Eligibility
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.
How to Sell Electricity Back to the Grid
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. You can also 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.
Tax Benefits of Selling Electricity
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.
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.
Tips Make Your Savings Grow
- If you want to build up your savings, a financial advisor can help you create a financial plan. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you want to see how quickly your savings can grow in the bank, SmartAsset’s free savings calculator could help you estimate the amount over time.
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