Net metering is the system that utilities use to credit solar energy system owners for the electricity produced by their solar panels. With net metering, you only pay for the electricity that you use beyond what your solar panels can generate.
In Colorado, net metering allows for customers to receive a credit for every kilowatt-hour their solar panels produce at the same price residential customers are charged for electricity, up to 120% of their electricity demand for Investor Owned Utilities (e.g. Xcel Energy and Black Hills) or capped at 10 kilowatts for residential for municipal (e.g. Fort Collins) and cooperative utilities (e.g. electric cooperatives who purchase wholesale power from Tri-State or other power providers). As an example, the Yampa Valley Electric Association, an electric cooperative, provides 1:1 credit for solar up to 100% of production, and then a 3.3 cent credit for generation in excess of 100%.
Any excess production of kilowatt-hours can roll over to the next month’s bill. If the net production of electricity remains above consumption for a calendar year, then the utility must reimburse the customer if they don’t elect to roll it over. In March of 2018, solar-plus-storage systems were made eligible for net metering as well.