About Net-Metering

Minnesota Net-Metering Incentive - From Dsire Database of State Incentives for Renewables and Efficiency

“Net-metering” is a simplified method of metering the energy consumed and produced at a home or business that has its own renewable energy generator, such as a small wind turbine. Under net metering excess electricity produced by the wind turbine will spin the existing home or business electricity meter backwards, effectively banking the electricity until it is needed by the customer. This provides the customer with full retail value for all the electricity produced. Without net metering the excess production is sold to the utility at a much lower price.

Under existing federal law (PURPA, Section 210) utility customers can use the electricity they generate with a wind turbine to supply their own lights and appliances, offsetting electricity they would otherwise have to purchase from the utility at the retail price. But if the customer produces any excess electricity (beyond what is needed to meet the customer’s own needs), the utility purchases that excess electricity at the wholesale or ‘avoided cost’ price, which is much lower than the retail price. The excess energy is metered using an additional meter that must be installed at the customer’s expense. Net metering simplifies this arrangement by allowing the customer to use any excess electricity to offset electricity used at other times during the billing period. In other words, the customer is billed only for the net energy consumed during the billing period.

Wind energy is an intermittent resource, customers may not be using power as it is being generated, and net metering allows them to receive full value for the electricity they produce without installing expensive battery storage systems.

Net-metering reduces the installation costs for the customer by eliminating the need for a second energy meter.

Net metering provides a simple, inexpensive, and easily-administered mechanism for encouraging the use of small-scale wind energy systems.

Utilities benefit from net-metering by avoiding the administrative and accounting costs of metering and purchasing the small amounts of excess electricity produced by small-scale wind energy facilities. Consumers benefit by getting greater value for some of the electricity they generate and by being able to interconnect with the utility using their existing meter.

The only cost associated with net metering is indirect: the customer is buying less electricity from the utility, which means the utility is collecting less revenue from the customer. That’s because any excess electricity that would have been sold to the utility at the wholesale or ‘avoided cost’ price is instead being used to offset electricity the customer would have purchased at the retail price. In most cases, the revenue loss is comparable to having the customer reducing electricity use by investing in energy efficiency measures, such as compact fluorescent lighting, efficient heating and cooling equipment, or other highly-efficient appliances.

You can use your existing meter. Your standard kilowatt-hour meter used for most residential and small commercial customers accurately registers the flow of electricity in either direction. This means the ‘netting’ process associated with net metering happens automatically — the meter spins forward (in the normal direction) when the customer needs more electricity than is being produced, and spins backward when the customer is producing more electricity than is needed in the home or building. The meter registers the net amount of energy produced or consumed during the billing period.

To find out whether net metering is available in your location, contact the American Wind Energy Association at the address below, or go to the policy area of the AWEA web site, Click Here and follow the links regarding net metering.

Minnesota Net-Metering Incentive - From Dsire Database of State Incentives for Renewables and Efficiency