Net Metering/Virtual Net Metering

Guiding principles: Accessibility and Affordability, Sustainability and Flexibility
Barriers addressed: Cost, Physical Barriers and Home Ownership Status

There may be times when a solar energy system produces more energy than the customer needs at that moment. This excess solar power is delivered to the utility grid and used to meet the electricity needs of other customers nearby. Net metering ensures that solar customers receive full credit on their utility bills for this valuable contribution to the utility grid.  When customers generate more than they use, they can bank credits.  At times when customers need to use more power than what they generate, those banked credits can be applied to their bill to offset costs.

The simplicity of net metering has made it one of the most successful state policies for empowering consumers to use rooftop solar to meet their own electricity needs. A strong net metering policy ensures full retail credit for customer-generated solar power, without excess fees and or arduous restrictions on participation, system size, or customer eligibility, and allows credit rollover or excess credit payouts. Any reduction to the net metering credit or additional fees for solar customers has a higher negative impact on low-income customers.

Forty-five states currently have some form of net metering program. Leading states go beyond traditional net metering with programs like virtual net metering that expand access to multi-tenant buildings or clear the way for community shared solar arrangements by allowing customers to receive credit for a designated portion of the power produced by an off-site or shared system.

Net metering policies lay the foundation for many low-income solar programs, and can also be designed to act as an incentive unto themselves. In December 2015, the Mississippi Public Service Commission adopted the state’s first net metering standards and included an adder of two cents per kilowatt hour to the net metering credit for the first 1,000 qualifying low-income customers who sign up (Mississippi Public Service Commission, In re: Order Establishing Docket to Investigate the Development and Implementation of Net Metering Programs and Standards, Docket No. 2011-AD-2, at 16 (Dec. 2015). Low-income customers are defined as customers whose household income is at or below 200 percent of the federal poverty level, or similar requirement proposed by the electric utility to be approved by the Commission).