Distributed power systems are on the rise in the United States and despite the sluggish economy are expected to grow even more in 2010 ; as more and more consumers are taking action to produce their own power and offset energy costs. Colorado has committed to develop their Renewable Energy Portfolio Standard or RPS to 20% by the year 2020.
In order to meet these initiatives many states have set standards in place for connecting to the power grid (also known as interconnection) and net metering. Because distributed power systems are owned by individual (be it a home, a farm, a school, or a business) Interconnection and net metering are essential for customers taking action with a distributed power systems such as a wind turbine or solar panels. Solid policy around interconnection and net metering help customers optimize their investment and often see the value of an out of pocket and upfront spend.
According to the newest edition of Connecting to the Grid, written by the Interstate Renewable Energy Council (IREC); as of July 2009 42 states plus DC has adopted net-metering policies. Colorado is one of these 42 states. So just what is net-metering? A simple definition of net-metering turns out to be not that simple, especially in Colorado.
In 1978, the Public Utility Regulatory Act (PURPA) allowed qualifying systems to connect into the power grid for the pure offset of a consumers power. This act propelled the interconnection but offered little to no incentive for customers to create their own energy. Net metering allowed customers the opportunity not only to connect to the power grid but to receive payment for the energy they produced. In some cases that production was returned to the customer dollar for dollar, meaning the customer was charged 10 cents per kWh used and received 10 cents per kWh produced. In some cases the customer was charged the same 10 cents per kWh consumed and received 3 cents per kWh produced. Regardless of the payment rate the meter reflected net results at the end of each billing cycle or net metering. So while Colorado has a net metering policy, the policy is not a state uniform policy; rather delegating interpretation to each separate utility.
Because each utility has governance over their net metering applications it is imperative to talk with the renewable representative from the local utility to understand their requirements, how they make payments (do they roll credits over, do they reset each month, do they reset each calendar year), and what happens if the distributed power system produces more than the home, school, farm, or business consumed? Reputable renewable companies that sell wind turbines and solar systems will often support consumers through the interconnection and net metering process. Time invested building a relationship with the local utility provider is essential for those interested in distributed power systems. This time could impact the return on investment for a system.
For more information on net metering in your area click here: Colorado Net Metering and Utilities
Amanda, the Renewable Energy Examiner can also answer questions for you at amanda.thompson5280@gmail.com
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