A residential photovoltaic (PV) system is relatively simple. There are solar panels, usually mounted on your roof, that generate DC current. An inverter converts the DC current to AC current, which is what we use in our homes. This system is connected to the utility grid at your service panel and the meter measures the amount of electricity coming from or going out to the grid.
During the daytime, the PV system will generate more electricity than we use and the extra will flow out to the grid. Our meter spins backward. When the sun goes down our PV production stops, but we still need electricity and we get it from the grid. Our meter spins forward. Net Metering is the accounting of electricity that flows in and out from the grid.