Net Metering Chandra Shah, NREL
[email protected]
303-384-7557
FUPWG Spring 2014
May 8, 2014
1 | Energy Efficiency and Renewable Energy eere.energy.gov
Overview
• Net metering definition and key considerations
• Net metering information on Database of State Incentives for
Renewables & Efficiency (DSIRE)
• State net metering program examples
• Example renewable project steps
• Meter aggregation and virtual net metering
• Distributed generation cost/benefits studies
• Resources and other information
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Net Metering Definition
For electric customers who generate their own electricity, net
metering allows for the flow of electricity both to and from the
customer – typically through a single, bi-directional meter. When
a customer’s generation exceeds the customer’s use, electricity
from the customer flows back to the grid, offsetting electricity
consumed by the customer at a different time during the same
billing cycle. In effect, the customer uses excess generation to
offset electricity that the customer otherwise would have to
purchase at the utility’s full retail rate. Net metering is required
by law in most U.S. states, but state policies vary widely.
Source: Database of State Incentives for Renewables & Efficiency
(DSIRE) - http://www.dsireusa.org/glossary/
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Net Metering Considerations
Research net metering rules carefully!
• Eligibility – ensure that your project fits the criteria
o Allowable technology
o Maximum project size (referred to as “system capacity limit” on DSIRE)
o Customer type
o Utility - IOU vs. public utility
• REC ownership
• Treatment of net excess generation
• Additional fees such as standby charges (if any)
• Aggregate capacity limit
• Contractual requirements
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http://www.dsireusa.org/documents/summarymaps/net_metering_map.pdf
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DSIRE - Net Metering Information for Colorado
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CO26R&re=1&ee=0
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Example State Net Metering Programs
Net metering policies vary widely. Examples:
• Some states (such as Texas) do not have a net metering policy
o Must find other options for excess electricity sale: ex. Register as a
Qualified Facility and sell power under Public Utility Regulatory Policies Act
of 1978 (PURPA)
– Usually at utility's avoided cost (a wholesale rate) or a negotiated rate
• New Mexico
o REC Ownership: Utility owns RECs
o Net Excess Generation: Credited to customer's next bill at avoided-cost
rate or reconciled monthly at avoided-cost rate
o System Capacity Limit: 80 MW
o Aggregate Capacity Limit: No limit specified
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Example State Net Metering Programs
• Colorado
o Net Excess Generation: Credited to customer's next bill at retail rate.
– IOUs: At end of year customers can roll over credit indefinitely or receive payment
at average hourly incremental cost
– Municipality and co-ops: annual reconciliation at a rate they deem appropriate
o System Capacity Limit:
– IOU customers: 120% of the customer's average annual consumption.
– Municipality and co-op customers: 25 kW for non-residential; 10 kW for residential
o Aggregate Capacity Limit: No limit specified
• New Jersey
o Net Excess Generation: Generally credited to customer's next bill at retail rate;
excess reconciled annually at avoided-cost rate
o System Capacity Limit: No capacity limit specified, but system must be sized
so that energy production does not exceed customer's annual on-site energy
consumption
o Aggregate Capacity Limit: No limit specified (Board of Public Utilities may limit
to 2.5% of peak demand)
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Example State Net Metering Programs
• California
o Net Excess Generation (NEG): Credited to customer's next bill at retail rate.
– At end of year customers can roll over credit indefinitely or to receive payment
at 12-month average spot market price (for 7 am to 5 pm)
– If customer makes no affirmative decision, credit is granted to utility with no
compensation for customer
o System Capacity Limit: 1 MW
o Aggregate Capacity Limit: 5% of aggregate customer peak demand
(statewide limit of 500 MW for fuel cells)
o REC Ownership: Customer owns RECs. If customer receives NEG payment
at end of year, then utility owns RECs associated with the NEG
o Restriction on Additional Fees
– No new or additional charges (demand, standby, interconnection, minimum
monthly, etc.) beyond those of other customers in the rate class to which the
eligible customer-generator would otherwise be assigned
– CPUC ruling that technologies eligible for net metering (up to 1 MW) are
exempt from interconnection application fees and initial/supplemental
interconnection review fees
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Example Renewable Project Steps
Research net metering policies for your state/utility on DSIRE, then confirm all information with
your utility. (From DSIRE home page, click on your state, then scroll down to the Net Metering
section under “Rules, Regulations & Policies”. Or, look for your state on
http://www.dsireusa.org/incentives/index.cfm?SearchType=Net&&EE=0&RE=1 )
• Step 1: Does the state have a net metering policy and does the net metering policy
apply to your utility? Does it apply to federal agencies and your customer class?
• Step 2: Does your project qualify for net metering (renewable type and size)?
• Step 3: Consider net metering policy details such as REC ownership, net excess
generation rules, applicable charges, etc.
• Step 4: Does the state/utility have meter aggregation, virtual net metering, and/or
community renewables programs?
• Step 5: Compare estimated renewable generation to electricity load to determine if
net metering is required. If so, estimate net excess generation at the end of each
month and the end of the year. “Right size” the system accordingly.
• Step 6: Discuss contractual requirements and net metering details with utility. Ask
about other important policy and interconnection issues.
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Meter
Aggregation
And Virtual Net
Metering
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Meter Aggregation and Virtual Net Metering
• Meter aggregation - a renewable energy project can offset
the electricity load of a customer with multiple meters
o Example: A solar project at a federal site offsets the loads of
buildings that are separately metered
• Virtual net metering/group billing - multiple customers
receive benefits of a net-metered RE project, with resulting
bill credits allocated across the participating customer bills
o Examples:
1. Federal campus with multiple agencies that are separately metered
and receive benefits from a ground-mounted solar project on campus
2. Renewable project at one agency site benefits another federal agency
site within the same utility service territory
3. Multiple stores in a shopping mall receive benefits from solar project
on the mall roof
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Meter Aggregation and Virtual Net Metering Programs
• Meter Aggregation: Colorado, Delaware, Massachusetts & California
• Virtual net metering/group billing
o Vermont: 22 groups in Central Vermont Public Service and Green Mountain
Power service territories have formed to share the output of a renewable
energy system with system sizes ranging from 1.5 to 199 kW
• NREL report has more information
http://www.nrel.gov/docs/fy12osti/54570.pdf
• California Meter Aggregation:
o Virtual net metering allowed for multi-tenant properties
o Meter aggregation allowed for local governments if all participating accounts
receive a time-of-use rate
o Meter aggregation may be allowed for all customers with multiple meters on
parcels of land contiguous to the location of the renewable energy system
(pending CPUC and other approvals)
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Distributed
Generation Costs
and Benefits
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Distributed Generation Cost/Benefits Studies
• Clean Power Research - “Net Metering: Quantifying Benefits and
Sharing Costs”
– PowerPoint that includes potential alternatives to Net Metering (Value of
Solar, Cost of Services)
– http://www.cleanpower.com/wp-content/uploads/Net_Metering-
PVAmericaEast-Feb13.pdf
• Electric Power Research Institute (EPRI) - Three-phase initiative to
provide stakeholders with information and tools that will be integral
to four key areas of collaboration. This work is explored in a concept
paper titled: “The Integrated Grid: Realizing the Full Value of Central
and Distributed Energy Resources”
– http://www.epri.com/Our-Work/Pages/Integrated-Grid.aspx
– http://www.epri.com/abstracts/Pages/ProductAbstract.aspx?ProductId=0000
00003002002733
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Distributed Generation Cost/Benefits Studies
• Interstate Renewable Energy Council (IREC): “A REGULATOR’S GUIDEBOOK:
Calculating the Benefits and Costs of Distributed Solar Generation”
– Offers lessons learned from RMI paper and then proposes a standardized valuation
methodology for PUCs to consider implementing in future studies
– http://www.irecusa.org/wp-content/uploads/2013/10/IREC_Rabago_Regulators-
Guidebook-to-Assessing-Benefits-and-Costs-of-DSG.pdf
• NREL: “Regulatory Considerations Associated with the Expanded Adoption of
Distributed Solar”
– A paper intended to help regulators understand the options and issues associated with
regulatory models/rate design alternatives available to address the challenges posed by
the transition toward increased adoption of distributed PV
– http://www.nrel.gov/docs/fy14osti/60613.pdf
• Rocky Mountain Institute (RMI): “A Review of Solar PV Benefit & Costs Studies”
– Reviews 16 DPV benefit/cost studies to assess what is known and unknown about the
categorization, methodological best practices, and gaps around PV benefits and costs
– http://www.rmi.org/elab_empower
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Resources and Other Information
• DSIRE Net Metering Policies
– http://www.dsireusa.org/incentives/index.cfm?SearchType=Net&&E
E=0&RE=1
• “A Guide to Community Shared Solar: Utility, Private, and
Nonprofit Project Development” (NREL)
– http://www.nrel.gov/docs/fy12osti/54570.pdf
• Distributed Generation Interconnection Collaborative (DGIC)
– http://www.nrel.gov/tech_deployment/dgic.html
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Federal Energy Management Program
Questions?
Contact Information
Chandra Shah
Senior Project Leader
303-384-7557
[email protected]
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