Diagram of a utility connected PV system
The U.S. DOE's Zero Energy Homes research initiative ...combines state-of-the-art, energy-efficient construction and appliances with commercially available renewable energy systems... [that] can result in net zero energy consumption. A ZEH, like most houses, is connected to the utility grid, but can be designed and constructed to produce as much energy as it consumes on an annual basis.
Like most homes, the ZEH design uses electricity from the electric utility grid. However unlike most homes, the ZEH puts electrical energy back into the grid. Ideally, the amount of electricity put back into the grid equals the amount used from the grid, on an annual basis. This means that during any particular month, the home may either have used more grid electricity than it put back or it may have put an excess of electricity back onto the grid. The goal is that at the end of a year, the electricity taken from the utility grid is offset by the solar electricity put back onto the grid — a Net-Zero Energy Home.
If the state you are living in has an annual net-metering requirement for the utility, the excess solar electricity put back onto the grid in one month can be credited against the following month's utility bills. The electric bill is zero (except for the base meter charge) until the monthly electric use is higher than the previous maximum for the year. In a ZEH, when the utility reads the meter each month, the total on the meter can actually be lower than the previous month. But there is no utility bill until the monthly total is higher than the previous maximum for the year! [For Example, the chart above shows that in March, the meter reading was about 7,500 kWh total, and for the next 5 months the meter reading never went above 7,500 kWh, resulting in no electrical charges on the utility bill].
The successful ZEH has two important elements - it uses less electricity than typical homes, and it uses solar (or wind) energy to produce electricity.
See Seven Steps to a ZEH for more ways to reduce energy use.