In recent weeks, New Hampshire lawmakers have worked to pass HB365 which would enable <5MW projects to qualify for net metering. More specifically, this would allow <5MW arrays to rescind their customer-generator status and bow out of wholesale market in order to become a retail load reducer. This breakthrough opportunity in New Hampshire has the potential to expose ratepayers to new energy opportunities such as diverse grid support and reduced price volatility. Ultimately, New Hampshire legislators are opening the door for private energy investments to stay within New Hampshire and continue to give back to New Hampshirites. With these forward thinking revelations of net-metering, it seemed like a great time to revisit and reframe our understanding of net-metering, the modern utility, and opportunities in your area.
In practice, net-metering is the idea of debiting and crediting an energy consumer based on the amount of electricity that they consume from the grid and produce to the grid. A consumer’s meter is bi-directional and has two functions. The first is that it measures the amount of electricity consumed on the site from the grid and debits their account. Conversely, the same meter measures the amount of electricity produced on the site that is sent to grid, in turn crediting their account. This ensures that the customer is only billed for their “net” energy consumption.
Net-metering is a regulatory policy that uses incentives to create solar opportunities. Other policies such as Virtual Net-Metering (VNM) and Feed-in Tariffs (FITs) serve a similar purpose to net-metering, but there are key, foundational distinctions. Standard net-metering policies operate on a monthly cycle of accounting for your consumption and production. At the end of the cycle, the accrued amount can be credited or debited back to you in one utility bill. Standard connection fees usually still apply. An important note, net-metering is not a revenue generating opportunity, it allows for ratepayers to create savings based on the productivity of their solar array. If you are interested in revenue generating opportunities, I would encourage you to look into solar renewable energy certificates (SRECs).
In accordance with Public Utility Regulatory Policies Act (PURPA), as amended by the Energy Policy Act of 2005, states have been encouraged to create new opportunities for net metering in the hopes of expanding clean energy consumption, reducing the demands on grid infrastructures, and helping states meet their ever-increasing Renewable Portfolio Standards (RPS). As a byproduct of these regulations, RTOs and ISOs work alongside utilities to manage net-metering opportunities. RTOs and ISOs are players within the energy sector that serve as “independent referees” to help monitor and coordinate the energy markets in their respective states and regions.
As net-metering becomes more prevalent, states have developed net-metering caps to manage the practice. Most net-metering caps (aka capacity limits) apply to commercial, industrial, and utility sized projects. Caps are broken down into public and private caps and are measured as a percentage of the total electrical distribution utility company load. Traditional state cap percentages vary in the 5-10% range. While this represents a marginal percentage of electrical demand, states have been expanding their net-metering caps in order to meet RPS and create green jobs.
To give you a better idea of the relationships in the energy market, we can view myself as an example. I am a resident living outside Boston, MA. I am a ratepayer to Eversource, a local utility. Eversource works with ISO-New England to manage their multi-state grid in New Hampshire, Massachusetts, and Connecticut. The State of Massachusetts sets its requirements for net-metering and ISO-New England and Eversource work with the state to meet those requirements. As a ratepayer of Eversource and a resident of Massachusetts, I benefit from the opportunity to net-meter with a solar array.
If you are hoping to learn more about net-metering, it is hard to do so without come across theories of cost-shifting. This can be a confusing concept within net-metering and the energy industry. In recent years, some utilities have grown abrasive towards net-metering policies because it allows for solar customers to contribute less monetary support towards maintaining the grid. Some solar pessimists claim that net-metering forces the hand of utilities to cost-shift the price of maintaining the grid on to the solar-less ratepayers. This generates conclusions that grid-tied solar homes are simply freeloaders to the grid. While this is not an opinion article, there have been numerous studies (Lawrence Berkley) supporting the negligible costs created for solar-less ratepayers.
With a foundational understanding of net-metering, and the players that have influence it’s practices, I encourage you to do research within your local area to identify net-metering opportunities! If you would like to learn more about your solar array options, take some time and connect with one of Greentech Renewables' dedicated Account Managers!