U.S. states failing on net metering


New York, NY, U.S.A. — (METERING.COM) — December 21, 2007 – While 39 of the 50 states in the U.S. have adopted statewide net metering programs, enabling compensation for consumers who own grid-tied renewable energy systems, the majority are failing to provide easy access to the electrical grid for these systems and only four states are doing their best to assure that the owners of such systems earn credit for power fed into the grid.

These are among the findings of a new review of net metering in the U.S., entitled “Freeing the grid” from the Network for New Energy Choices (NNEC), and updating a 2006 study.

Based on a methodology that grades the efficacy of state net metering and interconnection policies, the review finds that the top ranked states for net metering are New Jersey, Colorado, Pennsylvania, Maryland and California, while the lowest ranked are Utah, DC, Georgia, North Carolina and Wisconsin.

For interconnection the top ranked are New Jersey and Arizona, and the lowest ranked are North Carolina, DC, Wyoming, Louisiana, Delaware, Hawaii, Utah, and Missouri.

The report notes that the use of customer-sited distributed generation has surged nationwide – in California, for example, the limit on total customer participation in the net metering program was increased by a factor of five, from 0.5 percent to 2.5 percent, of each investor-owned utility’s peak demand – and there is increasing consensus on state-level best practices for net metering and interconnection standards.

However, utilities inexperienced with customer-sited distributed generation tend to oppose net metering, as they may see it as a potential safety or operational hazard to the grid, and/or as a threat to revenue. Smart, forward-looking utilities should view every household and every small business as a potential contract generator that could contribute clean, renewable electricity to the grid, helping the utility ensure reliable electrical service in a market strained by rising demand.

Common pitfalls that have rendered interconnection or net metering regimes unworkable include restricting eligibility to certain classes of customers, limiting the size of individual eligible renewable energy systems, preventing customers from receiving credit for excess electricity, capping the total combined capacity of all customer-sited generators, charging discriminatory or unclear fees and standby charges, demanding unreasonable, opaque or redundant safety requirements such as an external disconnect switch, creating an excessively prolonged or arbitrary process for system approval, requiring different technical provisions that vary by state to serve a distribution grid that is homogeneous nationwide, requiring unnecessary additional liability insurance, and failing to promote the program to eligible consumers.

Under the Energy Policy Act of 2005, states were required to have made a determination on standards for net metering and interconnection by August 8, 2007.