PSE&G Solar Net Metering: Banking and Annual True-Up

PSE&G net metering tracks solar export and grid draw separately on a bidirectional meter. Monthly surplus credits bank forward; annual true-up converts remaining kWh to a market-energy credit.

Sources reviewed: 2026-10-19

How PSE&G Net Metering Works for New Jersey Solar Customers

PSE&G net metering in New Jersey treats a solar customer as both a buyer and a supplier of electricity on the same account. When household demand exceeds what the panels are producing, the customer draws power from the PSE&G grid. When the panels produce more than the home needs, the surplus flows outward to the grid. Because electricity moves in two directions, a standard meter is insufficient, and PSE&G installs a bidirectional net meter that tracks both flows separately.

The net meter displays two registers, labeled "100" and "101" on a shared screen that cycles between them. Register 100 captures kilowatt-hours drawn from the PSE&G grid, called the "In" quantity. Register 101 captures kilowatt-hours exported to the grid, called the "Out" quantity. PSE&G records only what crosses the meter boundary, so solar electricity that is generated and consumed inside the home before reaching the meter does not appear in either register. This means a customer's solar production report from their contractor will typically show a higher output figure than the "Out" register on the PSE&G bill, and the gap represents self-consumed generation.

Each month, PSE&G issues a bill based on net consumption, the difference between kWh In and kWh Out for that billing period. Customers also continue to pay a daily service charge covering the grid connection itself, regardless of how the net energy calculation falls. Understanding these two distinct flows is the foundation for reading every line of a net metering bill correctly.

Sources: PSE&G Net Metering Overview.

Reading the In and Out Quantities on Your PSE&G Bill

Every PSE&G net metering bill presents three key data points derived from the bidirectional meter: the total kWh In, the total kWh Out, and the resulting net consumption or credit position for that month. The "In" figure is the electricity the grid supplied because the solar array was not generating enough to cover household needs, such as overnight hours or heavily overcast days. The "Out" figure is the electricity the array sent to the grid after household needs were fully met from solar production first.

A useful way to check whether these numbers are reasonable is to compare the "Out" figure against the production report available from the solar contractor. Because PSE&G records only excess generation that crosses the meter, the "Out" value will always be equal to or less than total panel production for the same period. The difference represents self-use: solar kilowatt-hours consumed directly by appliances in the home. Neither PSE&G's meter nor the bill can confirm or dispute the total production figure, which is why customers who want detailed generation data must obtain it from their contractor or the inverter's monitoring system.

When the monthly Out exceeds the monthly In, the net position is in the customer's favor. Rather than receiving a check or an immediate credit at retail rate, those surplus kilowatt-hours are added to a running kWh bank that carries forward into future months. This banking mechanism is what makes the annual true-up relevant, and it is explored in detail in the sections that follow.

Sources: PSE&G Net Metering Overview.

The Monthly kWh Bank and How Credits Accumulate

PSE&G tracks cumulative net credits in what it calls the Energy Credit Bank, and the running total appears on each monthly bill under a column labeled Cumulative Difference. When a month's Out exceeds its In, one banked kWh is added for each surplus kilowatt-hour. When a month's In exceeds its Out, the bank is drawn down to cover the difference before any remaining grid consumption is billed. The bank begins at zero when the net meter is first installed and resets to zero at each annual Anniversary True-Up.

The following is a hypothetical simplified non-TOU example intended to illustrate the bank mechanics only. All quantities are invented, no actual rate, tariff period, service charge, or delivery component is included, and the numbers do not represent any guarantee of system performance. In Month A, assume grid In is 300 kWh and grid Out is 500 kWh. The Out exceeds the In by 200 kWh, so 200 kWh are added to the bank, which began at zero. The bank now holds 200 kWh. In Month B, assume grid In is 450 kWh and grid Out is 350 kWh. The In exceeds the Out by 100 kWh, meaning 100 kWh of net grid consumption must be settled. The bank supplies those 100 kWh, leaving 100 kWh in the bank after Month B. No additional grid energy charge applies to the 100 kWh drawn from the bank in this illustrative scenario.

Customers on a Time-of-Use rate face an additional layer of complexity: each rate period maintains its own separate Energy Credit Bank, and credits earned during a peak period can only offset future peak-period consumption. Peak and off-peak banks cannot be combined. This section addresses the simpler flat-rate bank structure; customers on TOU rates should confirm the specific treatment of each bank with PSE&G directly.

Sources: PSE&G Net Metering Overview.

The 12-Month Contract Year and Anniversary True-Up Date

PSE&G's net metering cycle runs on a 12-month contract year that begins on the date the net meter was installed, not on January 1 or any other fixed calendar date. At the end of each 12-month period, PSE&G performs an Anniversary True-Up, calculates the monetary value of any kilowatt-hours remaining in the bank, applies that monetary credit to the account balance, and resets the kWh bank to zero so the next contract year can begin fresh. Customers will see the monetary credit on a normal monthly bill only if credits remain at the anniversary date.

Because the anniversary date is set to the meter installation date, it may not align well with a household's solar production pattern. PSE&G notes that the best anniversary month is generally the one immediately before the period in which the system is expected to begin accumulating its largest seasonal bank of credits. For most New Jersey homes, that means a spring or early-summer anniversary allows the bank to fill during peak production months and be drawn down during winter, rather than forcing a true-up and reset at the start of the high-production season when the bank is still small.

As a one-time courtesy, PSE&G will change a customer's anniversary date upon request. The utility recommends waiting until at least one full year of billing history has accumulated before making that request, so the customer can observe the actual seasonal pattern of their In and Out quantities and choose the optimal reset month with real data rather than estimates. Once the change is made, no further adjustment is available, so the decision warrants careful review of the billing record.

Sources: PSE&G Net Metering Overview.

How Remaining Credits Are Valued at the Anniversary True-Up

Any kilowatt-hours left in the bank at the anniversary date are not paid out at the retail rate on the bill. Instead, PSE&G determines their monetary value using the market price from New Jersey's Clean Energy Program. That rate reflects the actual cost to purchase power in the wholesale market and explicitly excludes delivery charges and system charges. This distinction matters: a customer who ends the year with a surplus bank balance will receive a monetary credit smaller than what retail kilowatt-hour prices might suggest, because retail rates bundle in delivery and infrastructure costs that the market-energy-only mechanism does not.

The price itself is derived from hourly prices generated by PJM, which operates New Jersey's competitive electricity wholesale markets. The hourly prices vary by customer class (residential or commercial) and by voltage level (primary, secondary, or transmission). They fluctuate with fuel costs, demand conditions, and available generating capacity, so the per-kWh value applied at any given anniversary will differ from prior years and cannot be predicted in advance.

Continuing the hypothetical example from the earlier section (all figures invented, no actual tariff implied): if 100 kWh remain in the bank at anniversary and an illustrative market-energy price of $0.04 per kWh applies, the resulting monetary credit is $4. That $4 appears on the account and shows on the monthly bill; it is not a cash payment. The $0.04 figure is invented solely to demonstrate the calculation structure and is not a representation of any actual PJM price, past or present. Customers seeking the rate that will apply at their specific anniversary should monitor PSE&G communications and consult the net metering program page for current program parameters.

Sources: PSE&G Net Metering Overview.

The Three-Step PSE&G Interconnection Process

Connecting a solar system to the PSE&G grid in New Jersey follows a structured three-step sequence: submitting a pre-construction interconnection application, receiving preliminary approval before construction begins, and completing a post-construction documentation and inspection phase before the system may operate. PSE&G is not associated with any solar company and does not install or maintain solar systems; the customer must hire a licensed solar contractor. The contractor may submit the application on the customer's behalf, but the customer must still sign the interconnection agreement.

Before submitting an application, customers or contractors are encouraged to enter the installation address into PSE&G's Solar Power Suitability Map, which provides a preliminary assessment of whether the local distribution circuit can accommodate the proposed system. The interconnection level must then be determined. Level 1 covers certified inverter-based units with an AC nameplate rating of 50 kWAC or less and an export capacity of 25 kWAC or less. Level 2 covers systems with an export capacity up to 2,000 kWAC. Level 3 applies to projects exceeding 2,000 kWAC export or those that do not qualify under Level 1 or Level 2 criteria. These thresholds are based on AC nameplate and export ratings, not the DC array size.

For Level 1, there is no application fee. PSE&G reviews the initial application within three business days and issues an interconnection response within 10 business days after that review is complete. Level 2 carries a fee of $50 plus $1 per kW of installed capacity, with an interconnection response within 15 business days. Customers uncertain about their project level can contact PSE&G at CINETMETER@pseg.com for guidance before submitting.

Sources: PSE&G Interconnection Application Process, PSE&G Level 1 Interconnection Agreement and Application.

Local Inspection, Certificate of Completion, and Utility PTO

The interconnection application consists of two parts. Part 1 is filed before construction begins. Part 2, the Certificate of Completion, is filed after construction is finished and after the local electrical inspection authority has verified that the installation complies with the National Electrical Code. Customers or contractors email the approved Uniform Construction Code Certificate of Approval, the Certificate of Completion, and as-built drawings to PSEG-CINetMeterPart2@pseg.com, noting whether the project is commercial or residential and including the notification number in the subject line.

After PSE&G receives the local inspection documentation, it schedules its own utility inspection within five business days and conducts that inspection within 13 business days for Level 1 or 20 business days for Level 2. The utility inspection is mandatory for final approval. During the inspection, the PSE&G inspector may determine that a meter change is necessary, in which case the meter is swapped and the customer may experience a brief power interruption. Part 2 fees must be paid before the final inspection can proceed for projects that carry them.

The outcome of the utility inspection determines whether the customer receives a Permission to Operate notice. Only after receiving a PTO from PSE&G may the system be turned on for normal operation. The Level 1 agreement explicitly permits operational testing not exceeding two hours before final PTO, but full energization before PTO is prohibited and presents a significant safety hazard to PSE&G electric distribution workers. If the inspection reveals deficiencies, PSE&G notifies the customer of the corrective steps required before re-inspection can be scheduled.

Sources: PSE&G Interconnection Application Process, PSE&G Level 1 Interconnection Agreement and Application.

Key Documents, Ongoing Obligations, and Account Considerations

The Level 1 Interconnection Application/Agreement is a two-part document that also functions as the binding terms for ongoing interconnected operation. Part 1 is the application and conditional agreement filled out before installation. Part 2 is the Certificate of Completion filled out after installation and before interconnection. The agreement covers safe operations, access rights for PSE&G metering equipment, periodic testing of protective functions, indemnification, limitation of liability, and conditions under which PSE&G may temporarily or permanently disconnect the system. The customer-generator is responsible for operating, maintaining, and repairing the facility to keep it compliant with the interconnection standards it was certified to meet.

One noteworthy provision concerns ownership transfer. The Level 1 agreement survives the sale of the property unless the new owner terminates it in writing. PSE&G is responsible for contacting the new customer to execute a new agreement or an assignation agreement so that net metering treatment continues correctly. Customers considering a home sale should be aware that the interconnection agreement, and the associated net metering billing cycle, is a documented encumbrance on the account that a new owner will need to address.

Customers enrolled in an Equal Payment Plan at the time of solar installation are removed from that plan and begin receiving standard monthly bills based on net consumption. Because the billing structure changes, reviewing at least a full year of bills before requesting an anniversary date change is strongly recommended. Customers seeking production data beyond what the PSE&G meter records must obtain it from their solar contractor, since PSE&G's metering captures only grid interactions and not generation consumed on-site.

Sources: PSE&G Level 1 Interconnection Agreement and Application, PSE&G Net Metering Overview.

Related research: Utility solar billing guides, new jersey solar guide, Your Electric Bill After Solar, Solar Permits, Inspections and Permission to Operate.