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What is Net Metering and How Does it Impact My Insurance?

With everyone looking for ways to cut costs, solar panels can seem very appealing. Companies such as FPL and Tesla have been sending out advertisements encouraging homeowners to install solar panels in order to help save money on electric bills. Additionally, the costs to install these solar panels have decreased significantly over the last several years.


One of the benefits of getting solar panels is that it gives you the opportunity to use net metering. Net metering is a process that allows you to participate in the electric grid as a distributed energy producer. Solar panels first supply power to the home, and at times when the solar panel produces more power than the home is using, the excess power is sent back onto the grid to be used by other customers. The meter “spins” backwards, subtracting the power sent onto the grid from the total power used by the consumer. At the end of the month, the consumer is charged only for net electricity used. This is how net metering gets its name! 


While net metering sounds great, you should be aware that it can have negative implications for your insurance. For example, some insurance companies do not accept net metering. This means that you may find yourself having to find an alternative insurance company, potentially one with higher costs that will eat into your net-metering savings. Why would this be an issue? From the insurance company’s perspective, there is greater risk of claims (both physical and liability claims) when net-metering occurs. Also, guaranteeing that your solar panels are insured correctly can be an issue, as various companies insure them in different ways. Our agents can help you review your situation and determine which options may be right for you. 

If you are thinking about participating in net metering, I recommend including ‘insurance’ as part of your due diligence process. Contact us before you do anything so we can discuss your options. We want to make sure you experience net-metering success, not net-metering sorrow 😊 If you are thinking about getting solar panels or participating in net-metering, please contact us!