When a customer is both a user of power from the grid and at times a net exporter of power back into the grid the metering equipment must be able to measure power flows in two directions. In its simplest form, a net meter is a meter that can spin in either the forward or backward direction based on the direction of power flow.
Net meters measure the net energy used by a customer that is both receiving energy from the grid and putting energy back onto the grid from an on-site generation source. In many locations, legislators have mandated net metering procedures and rules that allow customers to net their generation off the amount of usage for which they are billed. Most net metering rules are applied to customers with renewable energy such as rooftop solar but they may also apply to other distributed generation such as small cogeneration, fuel cells, or electric storage.
An alternative to a net meter, which costs more but provides more data and information on the actual amounts and directions of power flow at the customer facility, is to install two uni-directional meters. One measures power flow into the facility and another measures power flow out of the facility. This provides more information on the actual direction of power flow for use in load forecasting and scheduling, and, if time-of-use meters are used, they can also provide detailed information on when power is used. Another more expensive option is to use special smart meters and data acquisition systems that can simultaneously record the amount and direction of flow and provide additional technical information about the system.