Net metering

[2] Net metering is an enabling policy designed to foster private investment in renewable energy.

[3] Minnesota is commonly cited as passing the first net metering law, in 1983, and allowed anyone generating less than 40 kW to either roll over any credit to the next month, or be paid for the excess.

This is the simplest and most general interpretation of net metering, and in addition allows small producers to sell electricity at the retail rate.

[5] In 2005, all U.S. utilities were required to consider adopting rules offering net metering "upon request" by the Energy Policy Act of 2005.

[7] Net metering was slow to be adopted in Europe, especially in the United Kingdom, because of confusion over how to address the value added tax (VAT).

[8] The United Kingdom government is reluctant to introduce the net metering principle because of complications in paying and refunding the value added tax that is payable on electricity, but pilot projects are underway in some areas.

[14] An independent report conducted by the consulting firm Crossborder Energy found that the benefits of California's net metering program outweigh the costs to ratepayers.

[18] A 2014 report funded by the Institute for Electric Innovation[19] (which engages in lobbying for the benefit of its member electricity companies) claims that net metering in California produces excessively large subsidies for typical residential rooftop solar photovoltaic (PV) facilities.

The report concludes that changes are needed in California, ranging from the adoption of retail tariffs that are more cost-reflective to replacing net metering with a separate "Buy All - Sell All" arrangement that requires all rooftop solar PV customers to buy all of their consumed energy under the existing retail tariffs and separately sell all of their onsite generation to their distribution utilities at the utilities' respective avoided costs.

Experts have said that a good "successor tariff," as the post-net metering policies have been called, is one that supports the growth of distributed energy resources in a way where customers and the grid get benefits from it.

Typically the generation cost of electricity is highest during the daytime peak usage period at sunset, and lowest in the middle of night.

California, Italy and Australia has installed so many photovoltaic cells that peak prices no longer are during the day, but are instead in the evening.

Under California law the payback for surplus electricity sent to the grid must be equal to the (variable, in this case) price charged at that time.

[31] In some Australian states, the "feed-in tariff" is actually net metering, except that it pays monthly for net generation at a higher rate than retail, with Environment Victoria Campaigns Director Mark Wakeham calling it a "fake feed-in tariff.

In Victoria, from 2009, householders were paid 60 cents for every excess kilowatt hour of energy fed back into the state electricity grid.

In Queensland starting in 2008, the Solar Bonus Scheme pays 44 cents for every excess kilowatt hour of energy fed back into the state electricity grid.

However, from 2012, the Queensland feed in tariff has been reduced to 6-10 cents per kilowatt hour depending on which electricity retailer the customer has signed up with.

“The downside for Nova Scotia Power is that it must maintain the capacity to produce electricity even when it is not sunny.”[39] Denmark established net-metering for privately owned PV systems in mid-1998 for a pilot-period of four years.

Net-metering has proved to be a cheap, easy to administer and effective way of stimulating the deployment of PV in Denmark; however the relative short time window of the arrangement has so far prevented it from reaching its full potential.

[44] In 2010, Spain, net-metering has been proposed by the Asociación de la Industria Fotovoltaica (ASIF) to promote renewable electricity, without requiring additional economic support.

This legislation guarantees that this net metering policy will be kept for a minimum of 15 years from the moment of registering renewable energy source.

This legislation together with government subsidies for microgeneration created a substantial boost in installations of PV systems in Poland.

In fact the old analog electricity meters that would allow for true net-metering are immediately replaced when a consumer installs solar pv.

Almost every state in India has implemented net-metering,[52] wherein, the consumers are allowed to sell the surplus energy generated by their solar system to the grid and get compensated for the same.

To avail of net-metering in the country, the consumer is required to submit an application with the local electricity distribution company along with the planned rooftop solar project and requisite fee.

[54] The various DISCOMs in Maharashtra namely MSEDCL, Tata, Reliance and Torrent Power are expected to support net metering.

As of now MSEDCL does not use the TOD (Time of The Day differential) charging tariffs for residential consumers and net metering.

[58] 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 electricity systems.

Wind energy, in contrast, only receives around a half of the domestic retail rate, because the German system pays what each source costs (including a reasonable profit margin).

This is for safety – for example, workers repairing downed power lines must be protected from "downstream" sources, in addition to being disconnected from the main "upstream" distribution grid.