Net Metering in Alberta: How It Works and What It Means for Solar ROI

Net metering is one of the most important concepts to understand before going solar in Alberta — and one of the most frequently misunderstood. Here's a clear explanation of how it works and what it actually means for your energy bills and solar ROI.

What Net Metering Is

Net metering is a billing arrangement between you and your electricity utility that allows solar owners to export surplus generation to the grid and receive credits in return. Your utility installs a bidirectional meter that tracks both the electricity you draw from the grid and the electricity you export to it. At the end of each billing period, you pay only for the net difference.

In simple terms: generate more than you use, export the surplus, get credit. Draw from the grid when solar isn't generating, use your credits. Over a full year, a properly sized solar system generates enough credits in summer to cover a significant portion of winter consumption.

How Credits Work in Alberta

In Alberta, net metering credits are applied at the same rate you pay for electricity from your retailer. This is more favourable than some other provinces where exported power is credited at a lower wholesale rate. The credit rate varies by retailer and fluctuates with electricity market prices.

Credits accumulate month-to-month and are applied against future consumption. There is typically an annual true-up where any remaining credits are settled — the specific terms depend on your retailer agreement.

Sizing Your System for Net Metering

The goal of a net metering solar installation is usually to generate approximately as much electricity over a full year as you consume — achieving net-zero or near-net-zero annual electricity costs. This requires sizing the system to your annual consumption, not just your summer consumption.

A common mistake is sizing a system based on summer bills when consumption is lower, resulting in a system that doesn't generate enough credits to cover winter costs. Accurate sizing requires 12 months of billing history and an understanding of seasonal consumption patterns.

Net Metering for Farm and Commercial Properties

Farm and commercial properties can access net metering, but the economics are more complex because demand charges are billed separately from energy consumption. Net metering credits offset energy (kWh) charges — they don't reduce demand (kVA) charges. For operations where demand charges represent a significant portion of the total bill, a solar system that addresses only energy charges will deliver less total savings than projected.

This is the core reason why farm and commercial solar projects benefit from a thorough energy audit before system sizing. QuotePath's free energy audit for farms and commercial properties specifically addresses demand charges and rate structure analysis — ensuring the solar ROI projection accounts for the full billing picture.

Solis Energy handles net metering applications and utility interconnection for all Alberta installations. Contact us for a free assessment.