Solar Panel Electrical Storage: US States With Net Metering & How it Works
Editors Note: (To See If Your Utility Provider or State offers net metering to store solar electricity request a list at the bottom of this article.)
Discussions of alternative energy solutions involve learning some new terms. Solar electricity as a solution is fairly easy to understand, but its practical application involves the beaurocracies of the utility providers and government agencies, and the result is new terminology. “Net metering” is a term that is key to understanding how most practical systems will work and become affordable for the majority of solar system users now and in the future.
Net Metering by Reggie Rasmussen
October 25, 2007
Any photovoltaic solar system will at times produce more electricity than is currently being used.
So what happens to this excess electricity?
The excess electricity will go to one of two places –
1. A battery storage unit
2. To the utility company
Solar systems set up with battery storage capacity are very expensive and cause damage to the environment. Solar systems with batteries, while producing clean renewable energy leave a big problem in the waste disposal of the batteries when the useful life has been completed. Consumers that are looking to help the environment with solar electricity often defeat their purpose when batteries are used as a part of the system.
The other common method for excess electricity is to send it back to the current utility provider. This method is referred to as net metering. When the excess electricity is sent back to the utility provider, the customer’s meter will spin backwards. The customer is issued a credit for this excess electricity so that when it is needed such as on cloudy days or at night, the customer will draw electricity from their current provider. They will not be charged for this electricity as long as they have credits built up from the meter spinning backward when the excess was fed into the grid.
Why would the power company allow for net metering?
Net metering solves one of the utility providers biggest problems, PEAK POWER. Every utility company has times when more power is used than other times. This is usually during the summer days when the weather is hot and customers are using air conditioning. Since electricity cannot be stored, the power companies are forced to have production facilities that will handle a maximum load even though peak consumption will last for a very short time. This means that they must build factories that are not needed most of the time.
Net metering solves this problem for the utility providers. Most net metering is accomplished when photovoltaic solar systems are installed. These systems produce electricity when the sun is shinning, which by fate, is when the utility providers have their peak production problems. If they
allow net metering, excess electricity flows back into the grid when it is needed the most and everybody wins.
One problem. If 100% of all households had solar systems with net metering and not batteries, it would be great for the environment and for solar companies, but not so great for the utility providers. If almost all electricity is generated from solar all of the sudden utility companies cannot make a profit. Why is that a problem? The fact is that the solar industry is dependent on the power company for the infrastructure. Power lines, factories that produce power for backup, and transmission services are an essential part of providing low cost solar systems that use net metering. Keep in mind that systems with batteries are expensive and environmentally toxic.
Currently the two industries are in alignment. To resolve this dilemma, utilities have placed a limit as to how much electricity can be net metered. Some utility providers have caps as a percentage of the customers while other utility providers cap the amount of power that can be net metered. As solar becomes more popular, it is important to keep in mind these net-metered caps. When the caps are reached the customer will have to use batteries for storage capacity; this of course will make the systems more expensive and more environmentally unfriendly. Solarjoules has learned that one utility provider in New York has already reached their cap. (Click Here)
If you are convinced that solar is great and you want to get in before your utility company hits the net meter cap – but buying a solar panel system is just too expensive consider this: Citizenre has a program that allows customers to install a home solar power system and no purchase is required. A deposit of $500-1000 will be collected and the deposit is refundable at the end of the service contract with interest. Citizenre will rent the system to the consumer and the rent in most cases is covered by the reduction in the bill from the current utility provider. A complete solar system can be installed on your home and the amount that you will spend is usually the same or less than the amount you are already paying – all with no upfront charges.
If net metering is offered in your state it will be in BOLD in the list below.
States without any utilities offering net metering will be in ITALICS.
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.
SolarJoules believes that offering net metering is part of the solution to reducing our carbon emissions and becoming energy self reliant in this nation. If you believe that your utility provider or state should be offering net metering to everyone on the grid and by utilities in every state. If your state or utility provider does not offer net metering Click Here to link to a petition to ask your Governor, State Representative and Utility Company to change policy and reduce our dependence on carbon fuels.
Spin Your Electric Meter BackwardsSign Up Now! and solarjoules will take the necessary steps to help you reserve your system.
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Energy Bill 2007 Could Give Renewables the Green Light — or a Lump of Coal
The Energy Policy Act of 2005 enacted renewable energy tax credits, but most expire at the end of 2008. That tosses many tax and regulatory policies back up in the air. Congress has been working on two energy bills aimed at weaning the U.S. off oil, creating American jobs and addressing climate change. What will be in the 2007 energy bill, and what do renewable energy industry executives foresee if it passes — or if it doesn’t?
Denis Du Bois
November 01, 2007
The U.S. House of Representatives passed the New Direction for Energy Independence, National Security and Consumer Protection Act (H.R. 3221), and the Renewable Energy and Energy Conservation Tax Act (H.R. 2776), which combine to repeal US $23 billion in government subsidies to oil companies, and redirect most of that money to support solar, geothermal, biomass and marine renewable technology. The bills are not law until the House and Senate agree on a version that passes votes in both chambers.
Incentives support growth industries
There are no subsidy-free sources of energy. Subsidies typically help emerging industries and technologies to get past their initial cost barriers. The interaction of the federal renewable energy electricity production tax credit (PTC) with state renewable portfolio standard (RPS) policies has forged a strong incentive for wind energy development, and we’re seeing the results. The Investment Tax Credit (ITC) has likewise spurred growth in the U.S. deployment of solar power systems.
“This year the photovoltaic market is on track to grow by over 60 percent in the United States,” says Rhone Resch, president of the Solar Energy Industries Association. “Much of this growth was spurred by the federal tax incentives in the 2005 energy bill. Unfortunately those incentives were too short-lived and will expire in 2008, without an extension.”
The impermanence of both the PTC and ITC has held back a renewable energy full court press in the U.S., except in certain states that have the policies and incentives to promote growth.
States doing it right
“Because of the favorable incentives that are in place in California, that’s where our business has grown most rapidly,” says Barry Cinnamon, CEO of Akeena Solar in Los Gatos, CA. As for the energy bill, Cinnamon’s priority is “to make sure there are federal incentives so the benefits of solar power can be transmitted throughout the country.”
“The 2007 energy bill, with its 30 percent tax credit and no cap, gives us the opportunity over the next 8 years to expand our markets from a few states to most states,” says Roger Efird, president of Suntech America, the U.S. arm of a major Chinese solar manufacturer. “Experience has shown us that solar markets can be created when commercial customers achieve a return on their investment in seven years or less.” He notes that the existing ITC created that kind of ROI only in states with their own incentives, such as California, New Jersey, Oregon and Connecticut.
Successful incentives make themselves unnecessary
“Americans want solar, and solar can go mainstream” says Tom Werner, CEO of SunPower in San Jose, CA. “The economics need to improve, and they improve by the industry scaling. The industry scales by having long-term visibility.” SunPower believes it can reduce costs by half, if demand warrants scaling up production. “Provided there’s a long-term market — and the ITC would provide that — then companies can reduce costs so there’s no longer an incentive needed. I think that’s unprecedented,” Werner says.
Without federal support, will U.S. industry be out of the game?
“If the ITC doesn’t get extended, basically concentrated solar power will stop in the U.S.,” says Santiago Seage, CEO of Abengoa Solar, a Spanish developer of CSP energy plants. “The companies leaving this market will invest elsewhere, and not only in Japan and Germany. There are many countries now, worldwide, that are approving the equivalent of the ITC. We would invest somewhere else, which would be unfortunate.”
Werner agrees: “Capitalism works, markets are efficient,” he says. Without an ITC extension, “the industry will be focused elsewhere. Americans will be able to read about solar going to retail electric rate parity in other countries, and the U.S. will be a follower.”
Country rounding third base
“If it is passed, with the extension and the residential provisions, it’s going to be a turning point toward our country’s energy independence,” Cinnamon predicts.
“We are at a crossroads in determining America’s energy mix for the future,” Resch adds. “This energy bill will dramatically increase clean energy production. It creates a level playing field for energy technologies.”
“At one time or another over the past 100 years, there have been statements made that seemed ludicrous at the time,” Efird observes. “Things like, ’someday the entire nation will be electrified,’ or ’someday personal computers will be common in almost every household.’ All of these industries needed a little help when they were in their infancy. Now the solar industry needs a little help to be competitive. With that help, someday solar systems will be as commonplace as central heating and air conditioning.”
Observers slide to edge of seats
The major House-passed energy bill (H.R. 3221) would extend the PTC for four years past its scheduled expiration at the end of 2008, and it would establish a national RPS with a target of 15 percent by 2020. It would establish $2 billion in a new category of clean renewable energy (tax credit) bonds, extend for eight years the 30 percent level for the commercial solar tax credit, and remove the dollar cap on the residential solar tax credit. In addition, it would establish $15.3 billion in revenue offsets from oil and natural gas provisions to support tax incentives for renewable energy and energy efficiency.
The major Senate-passed energy bill (H.R. 6) has no RPS or tax provisions. Investors, businesses and solar company CEOs are waiting for the outcome of House-Senate negotiations on a final bill. Then there’s a serious risk that President Bush will veto anything substantive.
I found this on the U.S. Dept. of energy website. This is a great description ow net metering.
Net metering is a policy that allows homeowners to receive the full value of the electricity that their solar energy system produces. The term net metering refers to the method of accounting for a photovoltaic (PV) system’s electricity production, for example. Homeowners with PV systems can thus offset their electric bill with any excess electricity they produce. As the homeowner’s PV system produces electricity, the kilowatts are used first to meet any electric requirements (e.g., appliances, lights) in the home. If more electricity is produced from the PV system than the home needs, the extra kilowatts are fed into the utility grid.
Under federal law, utilities must allow independent power producers to be interconnected with the utility grid, and utilities must purchase any excess electricity they generate. Many states have gone beyond the minimum requirements of the federal law by allowing net metering for customers with PV systems. With net metering, the customer’s electric meter will run backward when the solar electric system produces more power than is needed to operate the home or business at that time. An approved, utility-grade inverter converts the dc power from the PV modules into ac power that exactly matches the voltage and frequency of the electricity flowing in the utility line; the system must also meet the utility’s safety and power-quality requirements. The excess electricity is then fed into the utility grid and sold to the utility at the retail rate.
In the event of a power outage, safety switches in the inverter automatically disconnect the PV system from the line. This safety disconnect protects utility repair personnel from being shocked by electricity flowing from the PV array into what they would expect to be a “dead” utility line.
At the end of the month, if the customer has generated more electricity than that used, the utility credits the net kilowatt-hours produced at the wholesale power rate. But if the customer uses more electricity than the PV system generates, the customer pays the difference. The billing period for net metering may be either monthly or annually. In some states, the excess generation credits at the end of each billing period are carried over to the next billing period for up to a year.
Net metering allows homeowners who are not home when their systems are producing electricity to still receive the full value of that electricity without having to install a battery storage system. Essentially, the power grid acts as the customer’s battery backup, which saves the customer the added expense of purchasing and maintaining a battery system.
Generally, the preferred method of accounting for the electricity under net metering is with a single, reversible meter. An alternative is dual metering, in which customers or their utility purchase and install two non-reversing meters that measure electrical flow in each direction. This adds significant expense to a PV system, however. The current trend around the country is toward a single, reversible meter.
Some utilities are opposed to net metering because they believe it may have a negative financial impact on them. However, a number of studies have shown that net metering can benefit utilities. These benefits include reductions in meter hardware and interconnection costs, as well as in meter reading and billing costs. Grid-connected PV systems can also help utilities avoid the cost of additional power generation, increase the reliability and quality of electricity in the grid, and produce power at times of peak usage, when utility generation costs are higher and they often need the extra power.
Additional information:
For detailed information on the availability of net metering in each state, visit the Green Power Network Web site.
For information about other incentives for solar energy systems, visit the Database of State Incentives for Renewable Energy (DSIRE) site.