What Is Net Metering?
What is net metering?
Net metering uses the excess electricity produced by wind turbines and solar electric
systems to 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.
What are the benefits and costs of net metering?
Net metering provides a variety of benefits for both utilities and consumers. Utilities
benefit by avoiding the administrative and accounting costs of metering and
purchasing the small amounts of excess electricity produced by small-scale wind
energy facilities. Consumers benefit by getting greater value for some of the electricity
they generate and by being able to interconnect with the utility using their existing
meter.
The only cost associated with net metering is indirect: the customer is buying less
electricity from the utility, which means the utility is collecting less revenue from the
customer. That’s because any excess electricity that would have been sold to the
utility at the wholesale or ‘avoided cost’ price is instead being used to offset electricity
the customer would have purchased at the retail price. In most cases, the revenue
loss is comparable to having the customer reducing electricity use by investing in
energy efficiency measures, such as compact fluorescent lighting, efficient heating and
cooling equipment, or other highly-efficient appliances.
The bill savings for the customer (and corresponding revenue loss to the utility) will
depend on a variety of factors, particularly the amount of excess electricity produced.
In most circumstances, however, the difference will be between $10-40 a month for a
10 kilowatt residential wind energy system.
Moreover, any utility revenue losses associated with net metering are at least partially
offset by administrative and accounting savings, which are not included in the above
figures. These savings can exceed $25 a month because, absent net metering, utilities
have to separately process the accounts of customers with wind turbines and issue
the monthly checks. In practice, these checks can be for as little as 5 cents.
Can I really use my existing meter to take advantage of net metering?
The standard kilowatt-hour meter used for most residential and small commercial
customers accurately registers the flow of electricity in either direction. This means the
‘netting’ process associated with net metering happens automatically — the meter
spins forward (in the normal direction) when the customer needs more electricity than
is being produced, and spins backward when the customer is producing more
electricity than is needed in the home or building. The meter registers the net amount
of energy produced or consumed during the billing period.
What is the current status of net metering?
Currently, 30 states require at least some utilities to offer net metering for small wind
systems, although the requirements vary from state to state. Most state net metering
rules were enacted by state utility regulators, and these rules apply only to utilities
whose rates and services are regulated at the state level. In recent years many
states have enacted net metering laws legislatively, including California, Connecticut,
Delaware, Massachusetts, Montana, Nevada, New Hampshire, New Jersey, Ohio,
Oregon, Vermont, Virginia, and Washington. In most of the states with net metering
statutes, all utilities are required to offer net metering for some wind systems,
although many states limit eligibility to small systems.
Net metering uses the excess electricity produced by wind turbines and solar electric
systems to 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.
What are the benefits and costs of net metering?
Net metering provides a variety of benefits for both utilities and consumers. Utilities
benefit by avoiding the administrative and accounting costs of metering and
purchasing the small amounts of excess electricity produced by small-scale wind
energy facilities. Consumers benefit by getting greater value for some of the electricity
they generate and by being able to interconnect with the utility using their existing
meter.
The only cost associated with net metering is indirect: the customer is buying less
electricity from the utility, which means the utility is collecting less revenue from the
customer. That’s because any excess electricity that would have been sold to the
utility at the wholesale or ‘avoided cost’ price is instead being used to offset electricity
the customer would have purchased at the retail price. In most cases, the revenue
loss is comparable to having the customer reducing electricity use by investing in
energy efficiency measures, such as compact fluorescent lighting, efficient heating and
cooling equipment, or other highly-efficient appliances.
The bill savings for the customer (and corresponding revenue loss to the utility) will
depend on a variety of factors, particularly the amount of excess electricity produced.
In most circumstances, however, the difference will be between $10-40 a month for a
10 kilowatt residential wind energy system.
Moreover, any utility revenue losses associated with net metering are at least partially
offset by administrative and accounting savings, which are not included in the above
figures. These savings can exceed $25 a month because, absent net metering, utilities
have to separately process the accounts of customers with wind turbines and issue
the monthly checks. In practice, these checks can be for as little as 5 cents.
Can I really use my existing meter to take advantage of net metering?
The standard kilowatt-hour meter used for most residential and small commercial
customers accurately registers the flow of electricity in either direction. This means the
‘netting’ process associated with net metering happens automatically — the meter
spins forward (in the normal direction) when the customer needs more electricity than
is being produced, and spins backward when the customer is producing more
electricity than is needed in the home or building. The meter registers the net amount
of energy produced or consumed during the billing period.
What is the current status of net metering?
Currently, 30 states require at least some utilities to offer net metering for small wind
systems, although the requirements vary from state to state. Most state net metering
rules were enacted by state utility regulators, and these rules apply only to utilities
whose rates and services are regulated at the state level. In recent years many
states have enacted net metering laws legislatively, including California, Connecticut,
Delaware, Massachusetts, Montana, Nevada, New Hampshire, New Jersey, Ohio,
Oregon, Vermont, Virginia, and Washington. In most of the states with net metering
statutes, all utilities are required to offer net metering for some wind systems,
although many states limit eligibility to small systems.
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
Alternative-Heating-Info.com