Rules, Regulations and Policies
NET METERING RULES
Net metering is often cited as one of the most significant policies to advance solar PV use. Net metering is essentially a electricity billing arrangement that provides an important incentive for consumers to install solar energy systems. Net metering enables customers to use their own roof-top solar generation to offset their electricity consumption and send excess on-site solar generation back to the grid and receive a payment for that generation from the utility. 1-kWh generated by the electric utility customer has the exact same value as 1-kWh consumed by the customer.
Net metering is a low-cost, easily administered method of encouraging customer investment in renewable energy technologies. It increases the value of the electricity produced by solar electricity generation and allows customers to "bank" their solar energy and use it at a different time than it is produced, giving customers more flexibility and allowing them to maximize the value of their solar production. Utility providers may also benefit from net metering because when customers are producing electricity during peak periods, the system load factor is improved.
Currently, net metering is available in 42 states and the District of Columbia. The rules vary significantly by state. Under most state rules, residential, commercial, and industrial customers are eligible for net metering, but some states restrict eligibility to particular customer classes. Other variations include the size of the systems eligible for net metering and and the establishment of system-wide caps on the amount of capacity available for net metering.
High size limits (2MW) for net metered renewable energy systems is encouraged to allow for larger distributed generation opportunities. New Jersey has a net metering cap of 2 MW and reports the highest rate of net metering enrollment in the U.S. States should consider adopting the Interstate Renewable Energy Council’s (IREC) model net metering rules which are the basis for programs in New Jersey and Colorado, both considered to have the best net metering policies in the nation. IREC’s model net metering rules are available at http://www.irecusa.org/fileadmin/user_upload/ConnectDocs/NM_Model.pdf.
Other excellent resources on net metering are the Clean Energy State Program Guide: Mainstreaming Solar Electricity – Strategies for States to Build Local Markets, Clean Energy Group, April 2008, and Freeing the Grid, a November 2007 report on net metering prepared for Network for New Energy Choices. To learn more about New Jersey’s net metering rules, please visit the DSIRE web site at http://www.dsireusa.org/library/includes/incentive2.cfm?Incentive_Code=NJ03R&state=NJ&CurrentPageID=1