Net MeteringChandra Shah, [email protected] Spring 2014May 8, 20141 Energy Efficiency and Renewable

Overview Net metering definition and key considerations Net metering information on Database of State Incentives forRenewables & 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 information2

Net Metering DefinitionFor electric customers who generate their own electricity, netmetering allows for the flow of electricity both to and from thecustomer – typically through a single, bi-directional meter. Whena customer’s generation exceeds the customer’s use, electricityfrom the customer flows back to the grid, offsetting electricityconsumed by the customer at a different time during the samebilling cycle. In effect, the customer uses excess generation tooffset electricity that the customer otherwise would have topurchase at the utility’s full retail rate. Net metering is requiredby law in most U.S. states, but state policies vary widely.Source: Database of State Incentives for Renewables & Efficiency(DSIRE) -

Net Metering ConsiderationsResearch net metering rules carefully! Eligibility – ensure that your project fits the criteriaoooo 4Allowable technologyMaximum project size (referred to as “system capacity limit” on DSIRE)Customer typeUtility - IOU vs. public utilityREC ownershipTreatment of net excess generationAdditional fees such as standby charges (if any)Aggregate capacity limitContractual requirements metering map.pdf5

DSIRE - Net Metering Information for ve.cfm?Incentive Code CO26R&re 1&ee 06

Example State Net Metering ProgramsNet metering policies vary widely. Examples: Some states (such as Texas) do not have a net metering policyoMust find other options for excess electricity sale: ex. Register as aQualified Facility and sell power under Public Utility Regulatory Policies Actof 1978 (PURPA)– Usually at utility's avoided cost (a wholesale rate) or a negotiated rate New Mexicooooo7REC Ownership: Utility owns RECsNet Excess Generation: Credited to customer's next bill at avoided-costrate or reconciled monthly at avoided-cost rateSystem Capacity Limit: 80 MWAggregate Capacity Limit: No limit specified

Example State Net Metering Programs ColoradooNet Excess Generation: Credited to customer's next bill at retail rate.– IOUs: At end of year customers can roll over credit indefinitely or receive paymentat average hourly incremental cost– Municipality and co-ops: annual reconciliation at a rate they deem appropriateoSystem 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 residentialoAggregate Capacity Limit: No limit specified New JerseyNet Excess Generation: Generally credited to customer's next bill at retail rate;excess reconciled annually at avoided-cost rateo System Capacity Limit: No capacity limit specified, but system must be sizedso that energy production does not exceed customer's annual on-site energyconsumptiono Aggregate Capacity Limit: No limit specified (Board of Public Utilities may limitto 2.5% of peak demand)o8

Example State Net Metering Programs CaliforniaoNet 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 paymentat 12-month average spot market price (for 7 am to 5 pm)– If customer makes no affirmative decision, credit is granted to utility with nocompensation for customerooooSystem Capacity Limit: 1 MWAggregate Capacity Limit: 5% of aggregate customer peak demand(statewide limit of 500 MW for fuel cells)REC Ownership: Customer owns RECs. If customer receives NEG paymentat end of year, then utility owns RECs associated with the NEGRestriction on Additional Fees– No new or additional charges (demand, standby, interconnection, minimummonthly, etc.) beyond those of other customers in the rate class to which theeligible customer-generator would otherwise be assigned– CPUC ruling that technologies eligible for net metering (up to 1 MW) areexempt from interconnection application fees and initial/supplementalinterconnection review fees9

Example Renewable Project StepsResearch net metering policies for your state/utility on DSIRE, then confirm all information withyour utility. (From DSIRE home page, click on your state, then scroll down to the Net Meteringsection under “Rules, Regulations & Policies”. Or, look for your state rchType Net&&EE 0&RE 1 ) Step 1: Does the state have a net metering policy and does the net metering policyapply 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 excessgeneration rules, applicable charges, etc. Step 4: Does the state/utility have meter aggregation, virtual net metering, and/orcommunity renewables programs? Step 5: Compare estimated renewable generation to electricity load to determine ifnet metering is required. If so, estimate net excess generation at the end of eachmonth and the end of the year. “Right size” the system accordingly. Step 6: Discuss contractual requirements and net metering details with utility. Askabout other important policy and interconnection issues.10

MeterAggregationAnd Virtual NetMetering11

Meter Aggregation and Virtual Net Metering Meter aggregation - a renewable energy project can offsetthe electricity load of a customer with multiple metersoExample: A solar project at a federal site offsets the loads ofbuildings that are separately metered Virtual net metering/group billing - multiple customersreceive benefits of a net-metered RE project, with resultingbill credits allocated across the participating customer billsoExamples:Federal campus with multiple agencies that are separately meteredand receive benefits from a ground-mounted solar project on campus2. Renewable project at one agency site benefits another federal agencysite within the same utility service territory3. Multiple stores in a shopping mall receive benefits from solar projecton the mall roof1.12

Meter Aggregation and Virtual Net Metering Programs Meter Aggregation: Colorado, Delaware, Massachusetts & California Virtual net metering/group billingoVermont: 22 groups in Central Vermont Public Service and Green MountainPower service territories have formed to share the output of a renewableenergy system with system sizes ranging from 1.5 to 199 kW NREL report has more .pdf California Meter Aggregation:ooo13Virtual net metering allowed for multi-tenant propertiesMeter aggregation allowed for local governments if all participating accountsreceive a time-of-use rateMeter aggregation may be allowed for all customers with multiple meters onparcels of land contiguous to the location of the renewable energy system(pending CPUC and other approvals)

DistributedGeneration Costsand Benefits14

Distributed Generation Cost/Benefits Studies Clean Power Research - “Net Metering: Quantifying Benefits andSharing Costs”– PowerPoint that includes potential alternatives to Net Metering (Value ofSolar, Cost of Services)– MeteringPVAmericaEast-Feb13.pdf Electric Power Research Institute (EPRI) - Three-phase initiative toprovide stakeholders with information and tools that will be integralto four key areas of collaboration. This work is explored in a conceptpaper titled: “The Integrated Grid: Realizing the Full Value of Centraland Distributed Energy Resources”– .aspx– t.aspx?ProductId 00000000300200273315

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 valuationmethodology for PUCs to consider implementing in future studies– IREC Rabago s-of-DSG.pdf NREL: “Regulatory Considerations Associated with the Expanded Adoption ofDistributed Solar”– A paper intended to help regulators understand the options and issues associated withregulatory models/rate design alternatives available to address the challenges posed bythe transition toward increased adoption of distributed PV– 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 thecategorization, methodological best practices, and gaps around PV benefits and costs– empower16

Resources and Other Information DSIRE Net Metering Policies– hType Net&&EE 0&RE 1 “A Guide to Community Shared Solar: Utility, Private, andNonprofit Project Development” (NREL)– Distributed Generation Interconnection Collaborative (DGIC)– deployment/dgic.html17


Federal Energy Management ProgramQuestions?Contact InformationChandra ShahSenior Project [email protected]

Net Metering May 8, 2014 Chandra Shah, NREL [email protected] 303-384-7557 FUPWG Spring 2014 . 2 Overview Net metering definition and key considerations Net metering information on Database of State Incentives for Renewables & Efficiency (DSIRE)