Net Metering: Renewable Energy Resources & Earn Electricity Kilowatt Credit

Net metering (net energy) provides consumers and businesses an incentive, utilize environmentally safe renewable energy power sources to produce electricity and receive kilowatt credit for surplus power (sometimes cash incentive), effectively reducing energy cost, especially now when utility costs are climbing higher as result of higher crude oil prices.

Increasingly consumers and businesses utilize renewable sources of energy (primarily solar, wind energy and hydro turbines 2) for electricity. Many electrical Utility companies offer Net Metering (or plan to offer this services through future state legislation), capability for consumers and business owners, draw any amount of excess or unused electricity from a renewable energy source (located on the premises) to their local utility grid system for future kilowatt credit. 1 Instead of storing the excess energy in batteries or have the excess go to waste. 2 A new meter installed (by the local electrical utility company) in homes or business works forward and backwards. If the renewable source of energy does not provide sufficient amount of electricity requirement, the meter will move forward, drawing electricity from the utility company. When the out - put of renewable source of energy provides more than sufficient requirement for the home owner or business, the excess amount is forward to the local electrical utility grid. The consumer or business benefits by receiving a credit (kilowatt - hours) on their account toward their next billing cycle. "If at the end of the year a surplus remains, then the customer is paid for the difference."1 Net metered customers still required to pay the same customer service charges and other monthly fees charged by their utility company.16 Several States have passed legislation regarding net metering laws. 1

Environmental policies and legislation have been enacted, save energy and reduce cost for consumers and businesses. In 1978 the Public Utility Regulatory Policy (PURPA) was passed and one of the most important aspects of law, created a market for non - utility power producers. "PURPA required utilities to buy power from independent companies that could produce power for less than what it would have cost for the utility to generate the power, called the "avoided cost"." Since 2005, seven percent of the United States power supplied from independent companies. 4 The Energy Policy Act of 2005 (July 29, 2005) signed into law by President George W. Bush, under Section 1251 requires all public utilities make available upon request net metering to their customers. 3 "Utilities have three years to implement the requirement". 5 Other provisions were included in the Energy Policy Act of 2005. 3

Net Metering has advantages for usage: Incentive for customers who use renewable energy systems, net metering requires only one meter compared to previously requiring two meters (one for out - going electricity and another for incoming electricity) to be read, credit earned during a month is applied to the next month or future months, useful when more electricity maybe required certain times during the year (The renewable energy source may not provide sufficient amount of electricity), and studies have shown net metering participants are more aware of energy consumption, thus likely to use less than more electricity. 5 Such as investing in energy efficient appliances, compact fluorescent lightening, efficient heating and cooling equipment. 6 Also, Customers save money instead of having to purchase and maintaining a battery back-up system. 8

Electrical utility companies argue for and against net metering. Potentially if more customers of electrical utility company convert to net metering, the utility company could suffer a financial loss, and depending upon the severity of the loss may have to increase the price they charge for electricity to non net metering customers. 5 "An analysis of net metering in California found that savings to the utility from avoiding the extra meter reading and billing would be about the same as the revenue lost from net metering. 2

Many States passed net metering and related limited legislation. New Jersey and Colorado have the best net - metering polices no limit on enrollment: Roll over month to month and pay annually for excess electricity. 3 In 1997, New York State enacted metering law for residential photovoltaic systems of 10 kW or less. "Later, that law was expanded to include farm waste generating systems of 400 kW or less." 7 In 2004, net metering further expanded in New York State include residential wind turbines (New York is the fifteenth windiest state in the country 15) up to 25 kW and farm - based wind turbines up to 125 kW.9 Further application of the net - metering law in the State of New York, expected to sign into legislation by Governor David Paterson (2008): Commercial enterprises take advantage of net metering establish wind, solar or other forms of renewable energy return for a credit when they produce extra energy. 15 Blair Horner of the New York Public Interest Research Group said: "The vision is the every Wal-Mart, every mall, every building with a flat roof will become 'green' because it will cut their energy costs."17 In February 1999, New Jersey enacted net metering utilizing photovoltaic (technology converts light directly into electricity 14) and wind - power generation systems for residential and commercial customers. In June 2006, Pennsylvania Public Utility Commission enacted regulations for net metering residents utilize on site electrical generating facilities (Including solar photovoltaic systems, solar thermal power, wind power, geothermal power, and biomass energy) limited to 50 kW and all other service locations up to 1,000 kW. 7 In May 2008, Governor Mark Sanford (South Carolina) signed resolution directing PSC (Public Service Commission) and the State Energy Office prepare by January 1, 2009, a draft report establishing net metering programs at all the State's utilities. 10 In April 2008, Kentucky Governor Steve Beshear enacted a new net metering law establishing capacity limitation (increase from 15 kW to 30 kW), credit limits, and limit utility's total net metering capacity to one percent of the prior year's peak load, besides the public service commission must develop rules and utilities have a limited time to file tariffs. 11 In April 2008, Florida Public Service Commission passed net metering rule permitting development customer owned renewable generation. Mathew M. Carter II, Public Service Commission Chairman said: "This rule is expected to increase the development of renewable generation in Florida, which will enhance fuel diversity and reliability. Customers - owned renewable generation also effectively acts as a conservation measure by reducing the amount of electricity purchased from utilities." 12 "In Canada, some Canadian provinces have net metering programs". 3

"Freeing the Grid" prepared by 'Network for Energy Choices (NNEC)', report as of September 2007: Best and worst net metering laws and interconnection standards around the United States. "The report finds that as of September 2007, only 34 states and the District of Columbia had statewide interconnection polices, and of those, 8 states and the District of Columbia received failing grades." The top five States graded 'A': California, Colorado, Maryland, New Jersey, and Pennsylvania. 13

References:

1.) What is Net Metering? - http://solar.calfinder.com/blog/solar-information/what-is-net-metering/

2.) Net Metering - http://www.microgenenergy.com/netmetering.htm

3.) Net metering - http://en.wikipedia.org/wiki/Net_metering

4.) Clean Energy - http://www.ucsusa.org/clean_energy/clean_energy_policies/public-utility-regulatory-policy-act-purpa.html

5.) Net Metering - http://www.eere.energy.gov/states/alternatives/net_metering.cfm

6.) Wind Energy FAQ - http://www.awea.org/faq/netbdef.html

7.) Net Metering - http://www.oru.com/programsandservices/billingandmetering/netmetering.html

8.) Net Metering - http://www.flatheadelectric.com/energy/netmeter.html

9.) Net Metering - http://www.flatheadelectric.com/energy/netmeter.html

10.) SOUTH CAROLINA - PSC to Accept Utility Net Metering Tariffs on Experimental Basis - http://www.irecusa.org/index.php?id=56&tx_ttnews[pS]=1213891621&tx_ttnews[tt_news]=1080&tx_ttnews[backPid]=31&cHash=587c792a6c

11.) KENTUCKY- Governor Enacts Net Metering Law - http://www.irecusa.org/index.php?id=56&tx_ttnews[pS]=1213891621&tx_ttnews[tt_news]=1076&tx_ttnews[backPid]=31&cHash=f16af103d5

12.) Florida Commission Approves Net Metering and Interconnection Rule - http://www.eere.energy.gov/state_energy_program/project_brief_detail.cfm/pb_id=1279

13.) Report: States Falling Short on Interconnection and Net Metering - http://www.eere.energy.gov/news/news_detail.cfm/news_id=11487

14.) Photovoltaics - http://en.wikipedia.org/wiki/Photovoltaics

15.) NEW YORK: Green bill close to becoming law - http://www.niagara-gazette.com/local/local_story_170190501.html

16.) Vermont Net Metering Information - http://cr.middlebury.edu/es/altenergylife/net_metering.htm

17.) Legislature, Paterson agree to energy deal - http://www.pressrepublican.com/0100_news/local_story_171094222.html