| Definitions of Net Metering and Distributed Generation Includes variations and systems for Net Metering and related topics such as Distributed Generation |
Return to Definitions Page . Return to Green-Metroplex Home Page . The web address of this page is http://www.green-metroplex.com/factoids/PV/Net_Metering.html Created: 7/05/2007 Revised: 3/30/2008 |
Net metering is a state level electricity policy for consumers who own "qualifying facilities,"
which are generally smaller, renewable energy sources such as wind or solar power generators.
"Net", in this context, is used in the sense of meaning "what remains after deductions" --
in this case, the deduction of any energy outflows from metered energy inflows. Under net
metering, a system owner receives retail credit for at least a portion of the electricity they
generate. The ideal has your existing electricity meter spinning backwards, effectively banking
excess electricity production for future credit. In reality, the rules vary significantly by country
and possibly state/province if net metering is available, if and how long you can keep your
banked credits, how much the credits are worth (retail/wholesale), etc. In North America, 40
U.S. States have some form of net metering in place.
.
In most of the United States, consumers can install small, grid-connected renewable energy
systems to reduce their electricity bills using a protocol called net metering. Under net
metering, electricity produced by the renewable energy system can flow into the utility grid,
spinning the existing electricity meter backwards. Other than the renewable energy system,
including and most importantly an inverter/controler device to change the Direct Current
electrical energy from the generation system into 60 Hz Alternating house power electricity
matched and locked into the same polarity as the grid power electricity, no special equipment
is needed.
.
Q. Why is net metering important?
.
A. There are three reasons net metering is important. First, as increasing numbers
of primarily residential customers install renewable energy systems in their homes, there needs
to be a simple, standardized protocol for connecting their systems into the electricity grid that
ensures safety and power quality. Second, many residential customers are not at home using
electricity during the day when their systems are producing power, and net metering allows
them to receive full value for the electricity they produce without installing expensive battery
storage systems. Third, net metering provides a simple, inexpensive, and <an> easily-
administered mechanism for encouraging the use of renewable energy systems, which provide
important local, national, and global benefits. Source: Home Power*
.
In addition to the three reasons above: The advent and the growing demand for
and use of Battery Electric Powered vehicles and the cost reduction demands by heavy
electric usage entities such as Bay Area Rapid Transit in California - has created policies in a
number of municipalities for the burgeoning use of free charging and reuse of stored electric
power at specialized parking facilities during peak summer hours. BART and a number of other
electric facilities are developing a means to store inexpensive off-peak energy for reuse during
peak, expensive, high demand hours. Net Metering systems installed in their commuter and
other car parks accommodates this new wrinkle in electric production. In the bay area a simple
policy change has created an inexpensive means for storage and use of otherwise expensive
peak demand energy and encouragement by a major municipality for its citizens to switch to
air pollution reducing Electric Vehicles while reducing their costs to commute. Essentially BART
gives away free charging at their car parks with the right to barrow back 30% of the stored
battery power in auto's hooked up to their charges, during the peak power load hours, when
they must otherwise pay a premium to utilities for that power.
.
With the advent of Web access via power lines, those utilities that opt for next generation
meters that allow web access have realized a landfall by their new ability to read their
retrofitted meters from the office, as it were, through their own transmission lines. Labor
costs shift to a handful of IT Specialists to program and debug automatic wattage usage audit
software programs. They can save a significant cost by retirement of their meter reading
vehicle fleets (with their accompanying smog production attributes) and meter readers and
their supervision staffs from their payrolls, as well. Once these new web enabled meters are
installed the doors should be wide open for end-users to install and use solar and wind
generation plants on the end of the grid, thus reducing or removing utilities' demand for new,
cheap coal fire power generation plants (and their incumbent pollution) during peak summer
hours. So long as end-users do not install solar or wind power plants larger than the existing
power delivery infrastructure can handle, there should be no physical reason to block or delay
the implementation of a alternative energy credit by municipalities, for their citizens that
contribute to the reduction of pollution by installing personal solar or wind power systems at
their address.
.
Time of use net metering employs a specialized reversible meter that is programmed to
value electricity at fixed values during different periods of the day, which may also vary with
differing seasons. This is available in California and is presumed to be highly favorable to smaller
systems that displace the highest cost electricity and systems, where the user's demand load
may be managed so that there is a net production of electricity during high cost periods. This
can be done for example, by chilling water during off peak times for air conditioning use during
high demand periods, or by pre-cooling the thermal mass of the building during low cost
periods.
.
With Market Rate net metering systems the user's energy use is priced dynamically
according to some function of wholesale electric prices. The users' meters are programmed
remotely to calculate the value and are read remotely. Net metering applies such variable
pricing to excess power produced by a qualifying systems.
.
Net purchase and sale is a different method of providing power to the electricity grid
that does not offer the price symmetry of net metering, making this system a lot less
profitable for home users of small renewable energy systems.
.
Under this arrangement, two uni-directional (Two One Direction) meters are installed—one
records electricity drawn from the grid, and the other records excess electricity generated and
fed back into the grid. The user pays retail rate for the electricity they use, and the power
provider purchases their excess generation at its avoided cost (wholesale rate). There may be
a significant difference between the retail rate the user pays and the power provider's avoided
cost.
.
A variation on uni-directional metering is the advent of Photovoltaic Rental Utilities.
(See also: Distributed generation, below.).
.
Photo Voltaic Electrical System Rental (Or Leasing) is a recent concept first introduced by
Citizenre and now other startups, in which a private photo voltaic utility installs a photo
voltaic solar array at a property owner or business owners' location and accepts rental
payments on a monthly basis from the property owner. The subscriber begins by making a
modest forfeiture deposit upon the successful installation of the private utilities' system which
includes PV modules, an inverter and a transfer module which synchronizes with the grid's 60
cycle per second electricity. Excess energy is sent into the net metered utility grid, spinning
the watt meter backwards. The rental utility will have in place the rates that the overall utility
will buy back power and resell that power to the utility. Most likely the rate structure, such as
currently in Texas, will be at the wholesale rate. However, the customer pays a locked in low
rate such as 8 cents per kWh to the Rental Utility and only pays a penalty to the net meter
utility if they exceed their own solar collection system capacity.
.
.
Distributed generation is the practice of generation of electricity from many small energy
sources. It has also been called on-site generation, dispersed generation, embedded
generation, decentralized generation, decentralized energy or distributed energy. At one point
in our nation's history ARPA (charged with the defense of the United States) advocated it
during the hight of the Cold War as an infra structural means to insure some level of electric
energy in the event of massive nuclear strikes, against major utilities, from foreign aggressors.
They were told by the Department of Defense to shut up. In light of the 9/11 event, this
may still be a viable alternative.
.
Currently, industrial countries generate more than 99% of their electricity in large power
plants, the majority of which burn coal. Some countries also use efficient generators burning
natural gas, nuclear reactors or hydro power.
.
These plants have excellent economies of scale, but usually transmit electricity long distances.
Coal plants do so to prevent pollution of the cities. Nuclear reactors are thought too unsafe to
be in a city. Dam sites are often both unsafe, and intentionally far from cities; which fact
reduces their efficiency by a tremendous factor. Coal and nuclear plants are too far away for
their waste heat to be used for heating buildings.
.
Low pollution is a crucial advantage of combined cycle plants that burn natural gas or that
gasify coal or that harvest and burn methane as from solid waste facilities. The low pollution
permits the plants to be near enough to a city to be used for district heating and cooling.
Power generation from solid waste methane also helps a municipality to reduce its carbon
footprint by using methane for fuel instead of being burned as it otherwise escapes into the
atmosphere. Micro combined cycle plants located in a city solid land fill bring their energy right
into the city and are able to supply their waste heat in some applications as well; which realize
respectable economies for such small operations. Focused solar generators with thermal mass
storage capability for extended night operations and Photovoltaic panels for daylight
operations during peak loads, are other, non-polluting sources of distributed generation.
.
Wind Turbine generators qualify as candidates for Distributed Generation, but in a practical
sense, they compete with coal fired plants at night when the wind is statistically most
abundant. Coal fired generators must remain at their peak temperatures at all times in order to
protect the firebricks from massive temperature changes, which damage them during no-load
periods if allowed to make rapid temperature fluctuations such as a full shut down and restart,
later. In Texas, wind turbines erected close to the deep oil shale areas where electric pumps
draw oil from great depths and inject heated water to liquefy the heaviest oil, are most cost
competitive by virtue of being in close proximity to their Distributed Generator sources.
.
Plug-in capable hybrid (PHEV) and electric only vehicles (EV's) currently are an integral
part of Bay Area Rapid Transit system planning (which uses overhead electric lines and third rail
power), in the San Francisco, California basin. BART wants to attract electric vehicle and
hybrid parking by their owners so much that it is providing 115 volt receptacles for their
patrons to plug-in and charge their batteries free of charge. During peak load periods,
BART will barrow back 30% of the energy in these vehicles batteries, rather than buy it
from the grid at punitive, peak-load commercial kWh rates. Transformers in parallel with
BART's electric lines supply both energy to or from the 115 volt plug-in receptacles in BART's
parking lots.
.
Any municipality can adapt a Distributed Generation system to their particular needs and
budgets. For example, BART also instituted so called soft purchase orders for hybrid or EV
vehicles for municipal fleets for the purpose of plugging them in during peak loads or for
emergency energy generation for their buildings and facilities, once these vehicles can be had
in bulk. Mainstream auto manufacturers need only start building these vehicles to enable
purchases by ready-made markets; who plan to make them a part of their Distributed Energy
grid.
.
Mainstream auto makers appear reluctant to make the switch, however, due to the higher
reliability of EV's in particular. Their after-market repair and spare parts sales will suffer, without
doubt. Sherry Boschert the award winning former medical reporter turned eco-advocate said
that it may take laws patterned after the seat-belt, air-bag, safety glass and other laws of
decades past, to force PHEV's and EV's delivered en mass by major auto makers. She points
out the fact that Toyota with its Prius Hybrid,
does not deliver a Plug-in version which they
have had for years, to Americans, because
they hold that option in reserve as a dominant
competitive weapon for market share.
There are currently two proven Li-Ion battery
variants that have 100% reliability
characteristics, which buries any concerns
that these batteries might be a fire hazard as
an argument against making them an integral
part of vehicles used for energy storage on a
Distributed Energy Net Metering grid...
Some municipalities have gone so far as to
put a bounty on Ni-Cad and Li-Ion batteries that
have dropped to 80% capability, to add to their own enormous energy storage banks, in
order to reduce their demand during peak load periods in which they must pay punitive rates
for their power.
.
Distributed Generation reduces the amount of energy lost in transmitting electricity because
the electricity is generated very near where it is used, perhaps even in or on the building
needing that energy. This contributes to a reduction in the size and number of power
transformers and lines that must be constructed. Ideally, installed generation equipment at
the site should not produce more output energy into the grid, than the currently installed
transformer/utility source already in place. A landmark court fight in California highlighted how a
major utility (PG&E) reacted to and fought against a large array, private solar electric system
that allegedly had greater output than the existing infrastructure could accommodate during
daylight hours. See: Solar Warriors .
which are generally smaller, renewable energy sources such as wind or solar power generators.
"Net", in this context, is used in the sense of meaning "what remains after deductions" --
in this case, the deduction of any energy outflows from metered energy inflows. Under net
metering, a system owner receives retail credit for at least a portion of the electricity they
generate. The ideal has your existing electricity meter spinning backwards, effectively banking
excess electricity production for future credit. In reality, the rules vary significantly by country
and possibly state/province if net metering is available, if and how long you can keep your
banked credits, how much the credits are worth (retail/wholesale), etc. In North America, 40
U.S. States have some form of net metering in place.
.
In most of the United States, consumers can install small, grid-connected renewable energy
systems to reduce their electricity bills using a protocol called net metering. Under net
metering, electricity produced by the renewable energy system can flow into the utility grid,
spinning the existing electricity meter backwards. Other than the renewable energy system,
including and most importantly an inverter/controler device to change the Direct Current
electrical energy from the generation system into 60 Hz Alternating house power electricity
matched and locked into the same polarity as the grid power electricity, no special equipment
is needed.
.
Q. Why is net metering important?
.
A. There are three reasons net metering is important. First, as increasing numbers
of primarily residential customers install renewable energy systems in their homes, there needs
to be a simple, standardized protocol for connecting their systems into the electricity grid that
ensures safety and power quality. Second, many residential customers are not at home using
electricity during the day when their systems are producing power, and net metering allows
them to receive full value for the electricity they produce without installing expensive battery
storage systems. Third, net metering provides a simple, inexpensive, and <an> easily-
administered mechanism for encouraging the use of renewable energy systems, which provide
important local, national, and global benefits. Source: Home Power*
.
In addition to the three reasons above: The advent and the growing demand for
and use of Battery Electric Powered vehicles and the cost reduction demands by heavy
electric usage entities such as Bay Area Rapid Transit in California - has created policies in a
number of municipalities for the burgeoning use of free charging and reuse of stored electric
power at specialized parking facilities during peak summer hours. BART and a number of other
electric facilities are developing a means to store inexpensive off-peak energy for reuse during
peak, expensive, high demand hours. Net Metering systems installed in their commuter and
other car parks accommodates this new wrinkle in electric production. In the bay area a simple
policy change has created an inexpensive means for storage and use of otherwise expensive
peak demand energy and encouragement by a major municipality for its citizens to switch to
air pollution reducing Electric Vehicles while reducing their costs to commute. Essentially BART
gives away free charging at their car parks with the right to barrow back 30% of the stored
battery power in auto's hooked up to their charges, during the peak power load hours, when
they must otherwise pay a premium to utilities for that power.
.
With the advent of Web access via power lines, those utilities that opt for next generation
meters that allow web access have realized a landfall by their new ability to read their
retrofitted meters from the office, as it were, through their own transmission lines. Labor
costs shift to a handful of IT Specialists to program and debug automatic wattage usage audit
software programs. They can save a significant cost by retirement of their meter reading
vehicle fleets (with their accompanying smog production attributes) and meter readers and
their supervision staffs from their payrolls, as well. Once these new web enabled meters are
installed the doors should be wide open for end-users to install and use solar and wind
generation plants on the end of the grid, thus reducing or removing utilities' demand for new,
cheap coal fire power generation plants (and their incumbent pollution) during peak summer
hours. So long as end-users do not install solar or wind power plants larger than the existing
power delivery infrastructure can handle, there should be no physical reason to block or delay
the implementation of a alternative energy credit by municipalities, for their citizens that
contribute to the reduction of pollution by installing personal solar or wind power systems at
their address.
.
Time of use net metering employs a specialized reversible meter that is programmed to
value electricity at fixed values during different periods of the day, which may also vary with
differing seasons. This is available in California and is presumed to be highly favorable to smaller
systems that displace the highest cost electricity and systems, where the user's demand load
may be managed so that there is a net production of electricity during high cost periods. This
can be done for example, by chilling water during off peak times for air conditioning use during
high demand periods, or by pre-cooling the thermal mass of the building during low cost
periods.
.
With Market Rate net metering systems the user's energy use is priced dynamically
according to some function of wholesale electric prices. The users' meters are programmed
remotely to calculate the value and are read remotely. Net metering applies such variable
pricing to excess power produced by a qualifying systems.
.
Net purchase and sale is a different method of providing power to the electricity grid
that does not offer the price symmetry of net metering, making this system a lot less
profitable for home users of small renewable energy systems.
.
Under this arrangement, two uni-directional (Two One Direction) meters are installed—one
records electricity drawn from the grid, and the other records excess electricity generated and
fed back into the grid. The user pays retail rate for the electricity they use, and the power
provider purchases their excess generation at its avoided cost (wholesale rate). There may be
a significant difference between the retail rate the user pays and the power provider's avoided
cost.
.
A variation on uni-directional metering is the advent of Photovoltaic Rental Utilities.
(See also: Distributed generation, below.).
.
Photo Voltaic Electrical System Rental (Or Leasing) is a recent concept first introduced by
Citizenre and now other startups, in which a private photo voltaic utility installs a photo
voltaic solar array at a property owner or business owners' location and accepts rental
payments on a monthly basis from the property owner. The subscriber begins by making a
modest forfeiture deposit upon the successful installation of the private utilities' system which
includes PV modules, an inverter and a transfer module which synchronizes with the grid's 60
cycle per second electricity. Excess energy is sent into the net metered utility grid, spinning
the watt meter backwards. The rental utility will have in place the rates that the overall utility
will buy back power and resell that power to the utility. Most likely the rate structure, such as
currently in Texas, will be at the wholesale rate. However, the customer pays a locked in low
rate such as 8 cents per kWh to the Rental Utility and only pays a penalty to the net meter
utility if they exceed their own solar collection system capacity.
.
.
Distributed generation is the practice of generation of electricity from many small energy
sources. It has also been called on-site generation, dispersed generation, embedded
generation, decentralized generation, decentralized energy or distributed energy. At one point
in our nation's history ARPA (charged with the defense of the United States) advocated it
during the hight of the Cold War as an infra structural means to insure some level of electric
energy in the event of massive nuclear strikes, against major utilities, from foreign aggressors.
They were told by the Department of Defense to shut up. In light of the 9/11 event, this
may still be a viable alternative.
.
Currently, industrial countries generate more than 99% of their electricity in large power
plants, the majority of which burn coal. Some countries also use efficient generators burning
natural gas, nuclear reactors or hydro power.
.
These plants have excellent economies of scale, but usually transmit electricity long distances.
Coal plants do so to prevent pollution of the cities. Nuclear reactors are thought too unsafe to
be in a city. Dam sites are often both unsafe, and intentionally far from cities; which fact
reduces their efficiency by a tremendous factor. Coal and nuclear plants are too far away for
their waste heat to be used for heating buildings.
.
Low pollution is a crucial advantage of combined cycle plants that burn natural gas or that
gasify coal or that harvest and burn methane as from solid waste facilities. The low pollution
permits the plants to be near enough to a city to be used for district heating and cooling.
Power generation from solid waste methane also helps a municipality to reduce its carbon
footprint by using methane for fuel instead of being burned as it otherwise escapes into the
atmosphere. Micro combined cycle plants located in a city solid land fill bring their energy right
into the city and are able to supply their waste heat in some applications as well; which realize
respectable economies for such small operations. Focused solar generators with thermal mass
storage capability for extended night operations and Photovoltaic panels for daylight
operations during peak loads, are other, non-polluting sources of distributed generation.
.
Wind Turbine generators qualify as candidates for Distributed Generation, but in a practical
sense, they compete with coal fired plants at night when the wind is statistically most
abundant. Coal fired generators must remain at their peak temperatures at all times in order to
protect the firebricks from massive temperature changes, which damage them during no-load
periods if allowed to make rapid temperature fluctuations such as a full shut down and restart,
later. In Texas, wind turbines erected close to the deep oil shale areas where electric pumps
draw oil from great depths and inject heated water to liquefy the heaviest oil, are most cost
competitive by virtue of being in close proximity to their Distributed Generator sources.
.
Plug-in capable hybrid (PHEV) and electric only vehicles (EV's) currently are an integral
part of Bay Area Rapid Transit system planning (which uses overhead electric lines and third rail
power), in the San Francisco, California basin. BART wants to attract electric vehicle and
hybrid parking by their owners so much that it is providing 115 volt receptacles for their
patrons to plug-in and charge their batteries free of charge. During peak load periods,
BART will barrow back 30% of the energy in these vehicles batteries, rather than buy it
from the grid at punitive, peak-load commercial kWh rates. Transformers in parallel with
BART's electric lines supply both energy to or from the 115 volt plug-in receptacles in BART's
parking lots.
.
Any municipality can adapt a Distributed Generation system to their particular needs and
budgets. For example, BART also instituted so called soft purchase orders for hybrid or EV
vehicles for municipal fleets for the purpose of plugging them in during peak loads or for
emergency energy generation for their buildings and facilities, once these vehicles can be had
in bulk. Mainstream auto manufacturers need only start building these vehicles to enable
purchases by ready-made markets; who plan to make them a part of their Distributed Energy
grid.
.
Mainstream auto makers appear reluctant to make the switch, however, due to the higher
reliability of EV's in particular. Their after-market repair and spare parts sales will suffer, without
doubt. Sherry Boschert the award winning former medical reporter turned eco-advocate said
that it may take laws patterned after the seat-belt, air-bag, safety glass and other laws of
decades past, to force PHEV's and EV's delivered en mass by major auto makers. She points
out the fact that Toyota with its Prius Hybrid,
does not deliver a Plug-in version which they
have had for years, to Americans, because
they hold that option in reserve as a dominant
competitive weapon for market share.
There are currently two proven Li-Ion battery
variants that have 100% reliability
characteristics, which buries any concerns
that these batteries might be a fire hazard as
an argument against making them an integral
part of vehicles used for energy storage on a
Distributed Energy Net Metering grid...
Some municipalities have gone so far as to
put a bounty on Ni-Cad and Li-Ion batteries that
have dropped to 80% capability, to add to their own enormous energy storage banks, in
order to reduce their demand during peak load periods in which they must pay punitive rates
for their power.
.
Distributed Generation reduces the amount of energy lost in transmitting electricity because
the electricity is generated very near where it is used, perhaps even in or on the building
needing that energy. This contributes to a reduction in the size and number of power
transformers and lines that must be constructed. Ideally, installed generation equipment at
the site should not produce more output energy into the grid, than the currently installed
transformer/utility source already in place. A landmark court fight in California highlighted how a
major utility (PG&E) reacted to and fought against a large array, private solar electric system
that allegedly had greater output than the existing infrastructure could accommodate during
daylight hours. See: Solar Warriors .
| Related Topic: Distributed Generation |
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