The extra energy produced by your solar array that goes back to the grid for others to use under an arrangement provided for by law is referred to as “net metering.” Net metering is established via state law.
The electricity your solar system generates always goes first into your home for your personal use. Then if you generate electricity during the day that you don’t use, it is sent on to the grid. Under the arrangement known as “net metering” you receive a one-to-one retail credit for this unused electricity. Then when the sun’s not out and you draw from the grid, you utilize this credit. In this way net metering essentially allows you to use your utility as a ‘virtual’ battery bank.
More specifically, at the end of the billing period, your meter reading tells the utility how much electricity you sent to the grid, and how much electricity you drew from the grid. Your utility adds these 2 figures up.
If you used more than you sent, you are billed and pay for those kWh.
If you sent more than you actually used, that balance is called the ‘net excess generation’.
In Missouri, you are compensated for ‘net excess generation’ at the wholesale rate. Net excess rarely occurs because most utilities will not allow you to install a system that will produce more electricity then you use over the course of a year.
From my utility rate spreadsheet > (Net Metering – same rules apply to every utility; customer credited exact same retail rate for generation equal to their month’s use, then utilities “avoided cost” for “net excess generation” for that month; unused credit for NEG carries over to next month;
In Illinois, you are compensated for ‘net excess generation’ at the full retail rate, and it is applied to monthly service charges or the next months bill. At the end of 12 months (3 for Cornbelt Coop) the accumulated remaining credit is simply zero’ed out – that is, you are never paid cash.