Anyone who’s checked out alternative energy sources for their family have come across the concept of net metering.  The prospect of “making the electric meter run backward” is very appealing to a lot of people.  But what exactly is net metering and how does it work?

PA utilities (and many other states) must offer net metering to residential customers that generate their own electricity with systems up to 50 kilowatts (kW) in capacity.  Net metering is available when any portion of the electricity generated by the consumer is used to offset their grid consumption.

Systems eligible for net metering include:

• photovoltaic (PV) solar electricity
• solar-thermal energy
• wind energy
• hydropower
• geothermal energy
• biomass energy
• fuel cells
• combined heat and power (CHP)
• municipal solid waste (burning trash)
• waste coal

Net metering is made possible through a single, bi-directional meter that can measure and record the flow of electricity in both directions at the same rate. When the consumer’s energy system creates more electricity than is needed, this “net excess generation” (NEG) is carried forward and credited to the customer’s next bill at the full retail rate. These consumers are compensated for remaining NEG at the utility’s “price-to-compare” at the end of the program year (defined as June 1 through May 31). The price-to-compare includes the generation and transmission components — but not the distribution component — of a utility’s retail rate. The utility must provide the bi-directional meter if the consumer needs one for their system.
Any consumer’s “net excess generation” (NEG) will be credited at the utility’s retail rate and carried over to the customer’s next bill during a 12-month period. Customers retain ownership of alternative-energy credits (commonly referred to as “renewable-energy credits” or “RECs” when associated with renewable energy) unless there is another setup in place with that utility.  Hey! You’re very own carbon offsets!

PA rules allow net metering on properties either owned or leased by a customer (in particular farm leases) – so if you’re operating a farm on someone else’s land you can still take advantage of  a net-metering arrangement.  One catch – your meter has to be within 2 miles of the property receiving the benefit of the alternative energy system (go figure).  Your utility is responsible for the necessary equipment to make the meter work.

• You can read here the complete PA alternative energy code text for net metering in Pennsylvania.
• Nationwide maps and guidelines for net metering programs.