Urban Power USA Inc.

What is Net Metering?

The following excerpt is taken from the Database of State Incentives for Renewables and Efficiency: http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=MA01R&re=1&ee=1

The Massachusetts Department of Public Utilities (DPU) adopted amended net-metering rules in July 2009 (see final order). These DPU rules were ordered in accordance with the legislative changes instituted in 2008. Furthermore in August 2009, the DPU issued its model net metering tariff so that customers in Massachusetts are subject to the same net metering tariffs regardless of utility.

The state's investor-owned utilities must offer net metering. Municipal utilities are not obligated to offer net metering, but they may do so voluntarily. (There are no electric cooperatives in Massachusetts.) The aggregate capacity of net metering is limited to 1% of each utility’s peak load.*

In Massachusetts, there are several categories of net-metering facilities. "Class I" facilities are generally defined as systems up to 60 kW in capacity. "Class II" facilities are generally defined as systems greater than 60 kW and up to one megawatt (MW) in capacity that generate electricity from agricultural products, solar energy or wind energy. "Class III” facilities are generally defined as systems greater than 1 MW and up to 2 MW in capacity that generate electricity from agricultural products, solar energy or wind energy. Massachusetts also allows “neighborhood net metering” for neighborhood-based Class I, II or III facilities that are owned by (or serve the energy needs of) a group of 10 or more residential customers in a single neighborhood and served by a single utility. The neighborhood facility may also serve additional customers (including commercial) as long as the base requirements are met. All net-metered facilities must be behind a customer’s meter, but only a minimal amount of load located on-site is required.

The treatment of customer net excess generation (NEG) varies by facility class and customer type. In all cases, the NEG is monetized and Net Metering Credits are calculated based on the excess kilowatt hours (kWh) produced. In summary, value of the Net Metering Credits at the end of a billing period is slightly less than the utility’s full retail rate for Class I solar and wind facilities, Class II facilities, and Class III facilities used by government customers as they would receive credit for the default service, distribution, transmission, and transition charge (kilowatt hour, kWh). Net Metering Credits for Class III facilities and neighborhood facilities that are used by customers other than government entities differs only in that they do not receive credit for the distribution component. Class II and Class III customers are required to install revenue-grade meters to measure kWh output.

Credits may be carried forward to the next month indefinitely, and credits from net metering facilities may be transferred to another customer of the same utility as long as they are within the same service territory and ISO-NE load zone. Utilities may choose to pay for the net metering credits for Class III facilities rather than allocating the credits. If a neighborhood facility has NEG at the end of a billing period, the credits are awarded to designated neighborhood customers. The amount of NEG attributed to each such customer is determined by the allocation provided by the neighborhood net metering facility. Credits may be carried forward to the next month indefinitely.

Third-party owned systems may be net metered. Utilities are not granted the renewable energy credits or environmental attributes generated by a net metered facility.

As part of the interconnection application, customers applying for net metering must complete "Schedule Z." See Massachusetts' Interconnection in DSIRE for more information.

This following excerpt is taken from the American Wind Energy Association's Website:

http://www.awea.org/faq/netbdef.html#top

"Net-metering" is a simplified method of metering the energy consumed and produced at a home or business that has its own renewable energy generator, such as a wind turbine. Under net metering, excess electricity produced by the wind turbine will spin the existing home or business electricity meter backwards, effectively banking the electricity until it is needed by the customer. This provides the customer with full retail value for all the electricity produced.

Under existing federal law (PURPA, Section 210) utility customers can use the electricity they generate with a wind turbine to supply their own lights and appliances, offsetting electricity they would otherwise have to purchase from the utility at the retail price. But if the customer produces any excess electricity (beyond what is needed to meet the customer’s own needs) and net metering is not allowed, the utility purchases that excess electricity at the wholesale or ‘avoided cost’ price, which is much lower than the retail price. The excess energy is metered using an additional meter that must be installed at the customer’s expense. Net metering simplifies this arrangement by allowing the customer to use any excess electricity to offset electricity used at other times during the billing period. In other words, the customer is billed only for the net energy consumed during the billing period.

Why is net metering important?

There are three reasons net metering is important. First, because wind energy is an intermittent resource, customers may not be using power as it is being generated, and net metering allows them to receive full value for the electricity they produce without installing expensive battery storage systems. This is important because it directly affects the economics and pay-back period for the investment. Second, net-metering reduces the installation costs for the customer by eliminating the need for a second energy meter. Third, net metering provides a simple, inexpensive, and easily-administered mechanism for encouraging the use of small-scale wind energy systems, which provide important local, national, and global benefits to the environment and the economy.

Please refer to either website for more questions on net metering or contact us on the "Contact Us" page and we will try to answer your questions.

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What is Net Metering?