NREVSP-460-21651 December 1996 Net Metering Programs Yih-huei Wan National Renewable Energy Laboratory A national laboratory of the U.S. Department of Energy The Topical Issues Brief series is sponsored by DOE's Office of Energy Efficiency and Renewable Energy Office of Utility Technologies Notice This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. 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NREVSP-460-21651 December 1996 Net Metering Programs Yih-huei Wan Prepared for: Office of Utility Technologies Energy Efficiency and Renewable Energy U.S. Department of Energy �·� - �­ •.....·-� ···� ·�� --· • �enter for Energy Analysis and Applications Natiomil Renewable Energy Laboratory Golden, Colorado 80401-3393 Operated by Midwest Research Institute for the U.S. Department of Energy Contents Abstract ..................................................................................................................................................... v I. Introduction......................................................................................................................................... 1 II. Net Metering Programs .... ......... .... ...... ... ... .... .......... ........................... .... ......... .. ... ................ ...... ........ ....... 2 Eligi ble GeneratingTechno logies ............. .... .... ....... ..................... ... .......... .... ...... ................ ... ......... 2 Eligi ble Cus tomer Classes .............. ...... ...................................... .......... .......... .... ............ .... ... ..., ..... 2 Individual Capacity Limitations........ .......................................................................................... 2 Total Generating Capacity Limitations . .... ................. ... ............... .. ......... ............. ....... ......... .. ... .. 2 Treatment of Excess Generation ................................................................................................. 2 Other Features of Net Metering Programs ............... ............. ..... ............. ........... ....................... .. 4 III. Rationale for Net Metering Programs .... .. ....... ...... ...... ............ .......... ... .......... ................ ........ ...... ... .. .. 4 Stakeholder Motivati on . .. ......... .............. ... ... ... ... ....................... .. ........... ....... ..... .. .. ... ...... ... .... .. .. 4 Electric Utility Industry Restructuring ... .... ..... .... .. ....... .......... ............... ... .... ......... .......... .. ... ......... 5 Legislative Process .................................................................................................................... 5 IV. Impact on Renewable Energy Technologies ............................................................................................... 6 V. Conclusions and Recommendations . ............. ................ ............. .......... .. ... .............. .. ........... .......... ......... .. 6 VI. Notes ......................................................................................................................................................... 7 Appendix: ..... ....... ..... .. ....... .. ...................... ....... ...... ..... .......... ............. .. .......................... ......... ... .... ..... 9 Arizona's Net Billing Rules . ...... ... ..................................................................... ............................. 9 California'sNet Metering Law ...............� ........................... .... .............................................. ............ 9 Colorado's Net Metering Program ..... ........................................................... ................................. 10 Connecticut's Net Metering Order .......... ....................... ................... .. .......... ... ................. ......... .. 10 Hawaii's Net Energy Metering Law ......................... .......................... ............. .............. ........ .. ..... 10 Idaho's Net Metering Order .... ............................................................................................. ... .. 10 Indiana's Net Billing Order .. .. .. ..... ... ........................... ..... ..... ......... ............... .......................... 10 Iowa's Net Billing Order .... ...... ... ... ..............................................·.··· .... ...... .... ....................... ....1 0 Maine's Net Metering Program .................................................. ..................... ............. ............ 11 Massachusetts' Net Metering Program .. .............. ........ ... ....... ............... .... .. ...... ....................... 11 Mi nnesota's Net Bi lling Law ....................... ..... ............. .................................................. .. .... 11 New Hampshi re's Net Metering Order .................................................................................... 12 New Mexico's Net Metering Rule .............. .............................................................................. 12 New York's Proposed Net Metering Bill ................................................................................... 12 North Dakota's Net Metering Order .......... .. .... ...... .... .... ........................................................... 13 Oklahoma's Net Billing Order ... ....... ...... .... ...... ....... .... ......... .......... ....... ......... .......... ........... ... 13 Rhode Island's Net Metering Order ......... .................. ............................................................... 13 Texas' Net Metering Order ......... ............................. ............. ............. ........ ...... ................... ... 13 Wisconsin's Net Billing Order ... ................ .......... ........... ................ ............. .. ............. .. ........... 14 Notes to Appendix ..................................... ........ .................................... ... .................... ....................... 14 Tables Table 1- Summary of State Net Metering Programs ...... ................................. ..... ............................................. 3 Table 2- California's Net Metering Capacity ................................................................ ..................... .... ............. 9 Table 3 - Iowa's Net Metering Capacity Cap .................................................................................................... 11 Net Metering Programs • iii Abstract Therehas been a recent surge of interest fromthe funding. Because more of the cus tomer-generated electric­ renewable energy industry and environmental groups in ity can receive a utility's retail price, it can lower the net metering.1 The reason for this interest is that net economic thresholdof small renewable energy facili ti es. metering is a simple, low-cost, andea sily administered method to encourage di rect customer investment in There are various net metering programs in the renewable energy technologies . The renewable energy country. Most are available to customer-owned small industry supports net metering because it removes an generating facili ties only, some further restrict the eligibi l­ economic disincentive for potential cus tomers by increas­ ity to renewable energy technologies. This Topical Issues ing the value of the electricity generated by renewable Brief discusses how thesenet metering programs have energy technologies. Environmental groups support net been implemented by differentutilities and states, what the metering because it promotes cleanenergy production. rationales are behind many net metering programs, and what the potential impact of net metering may be on the The concept of net metering programs is to allow deployment of renewable energy technologies. the electric meters of customers wi th generating facilities to turn backwards when their generators are produci ng Net Metering Programs was prepared by the more energy than the customers' demand. Net metering Center for Energy Analysis and Applications