Which of the following best describes net metering?

Net metering is best described as a billing mechanism that allows for credits to be issued for excess electricity generated by a solar energy system. Essentially, when a solar panel system produces more electricity than the home or business is using, the surplus energy is sent back to the grid. In doing so, the energy meter runs backward, allowing the owner to receive a credit on their utility bill for the extra electricity fed into the grid. This system effectively reduces the consumer's overall energy costs, as they are only billed for the net energy they consume after accounting for any excess energy produced.

This mechanism incentivizes the installation of solar panels and supports the transition to renewable energy by allowing homeowners and businesses to offset their consumption with clean energy generation. The other options do not accurately capture the essence of net metering, as they either refer to unrelated concepts or specific processes that do not pertain to the balance of electricity consumption and generation for residential or commercial users.