The Many Categories of Net Metering (Infographic)

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Originally published at nick-headshotilsr.org.

This article was written by Nick Stumo-Langer the Institute for Local Self-Reliance Energy Democracy initiative’s Communications Manager. He regularly publishes articles and designs graphics based on local, renewable energy.

placeholderNet metering is a common rule for the electricity system in nearly every state, allowing folks who generate their own electricity to get a fair credit on their bill for what they generate. But there’s more to the concept than a single person with solar on their rooftop, from cities wanting to offset energy use across many public buildings to “community solar” projects aggregating dozens or hundreds of electric customers into owning a share of a solar array nearby.

For some background, here’s the basic principle of net metering:

Net metering is a practice that encourages consumer investment in on-site electric generators – typically small-scale, renewable energy technologies. When a customer/generator is producing and consuming electricity at the same time, the laws of physics dictate that the electricity being produced flows to where it is being used. But what about when electricity is being generated and none is being consumed? In these instances net metering allows customer/generators to spin their meter backwards, in effect paying the customer/generator the retail rate for the electricity they generate but don’t immediately consume. If a customer generates more electricity than they consume over a period of time, they are typically paid for that net excess generation (NEG) at the utility’s avoided cost, or the wholesale rate. – John Farrell

The following infographic helps provide context of the five different kinds of net metering, and how they differ.

The Many Categories of Net Metering

To learn more, you can also visit our resources on aggregate net metering policy and virtual net metering policy.

For timely updates, follow John Farrell on Twitter or get the Energy Democracy weekly update.


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John Farrell

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

John Farrell has 518 posts and counting. See all posts by John Farrell