With the advent of alternative energy systems like wind and solar, several major changes have taken place with the grid that is used to supply power to homeowners. This interconnected system of wires, generating plants and towers is loosely referred to as the grid, and most homes built today are connected to it in order to provide power for their needs.

Initially this electricity was supplied by a local utility that generated its own power in plants nearby the locations they served. Over the years these systems have gone from fairly independent local power utilities to a very complex and interconnected grid that can supply power as a national network. Even though these systems had advanced in their connections, they were still designed to supply power in only one direction: from the utility to the home. Since the introduction of alternative energy systems for homeowners, these grids had to be modified to allow power to flow in both directions. This would then allow any homeowner that was generating their own electricity to send it back up the power lines to the local utility and produce a credit.

Most modern alternative energy systems rely on this back and forth trading of power to ensure the home is covered when the sun or wind is not supplying enough power for their needs. For example, a solar power system is normally designed to supply more power than a home would need during the day. This excess power is sent back up the lines to the local utility where it creates a credit for the homeowner. Then at night when the solar power system is dormant, the home can buy power back from the local utility for their needs and use the credit they generated during the day as payment. This way they can lower their electricity bill, or even eliminate it completely if they generate enough excess power.

The key to making these systems work involves an upgrade to some of the equipment the power companies use to deliver their power to the home. The meter that is mounted to the home needs to be upgraded to one that can spin in both directions. This will allow the proper tracking and credit for any power that a home generates during the day. This is easy to have changed and all power companies are required to offer one if requested. On the other end, the power company has to make some additional changes to be able to receive and utilize whatever power homeowners were generating and sending up the lines. Initially this excess power was used for other customers' power needs locally. Over the years a complete trading community has developed that tracks and prices the excess energy that is traded between utilities.

Another added bonus for the local power company is that since this power being generated by homeowners is from alternative energy, the utility will be able to offset their carbon requirements by buying it from homeowners. Many states and countries limit the amount of power a utility can generate by older methods that are dirtier and create more pollution. By installing an alternative energy solution in your home you can potentially eliminate your monthly electricity bill and help the planet as well by supplying this clean power to your local utility.