Net Metering Agreement
How do you get a net metering agreement (also known as an interconnection metering) agreement?
Connecting your PV system to the utility grid will require an interconnection agreement (also called a net metering agreement) and a purchase and sale agreement. Federal law and some state public utility commission regulations require utilities to supply you with an interconnection agreement. Some utilities have developed simplified, standardized interconnection agreements for small-scale PV systems.
The net metering agreement specifies the terms and conditions under which your system will be connected to the utility grid. These include your obligation to obtain permits and insurance, maintain the system in good working order, and operate it safely. The purchase and sale agreement specifies the metering arrangements, the payment for any excess generation, and any other related issues. The language in these contracts should be simple, straightforward, and easy to understand. If you are unclear about your obligations under these agreements, contact the utility or your electrical service provider for clarification. If your questions are not answered adequately, contact one of the groups listed in the artcle: "What Should You Know About Permits?"
National standards for utility interconnection of PV systems are being adopted by many local utilities. The most important of these standards focuses on inverters. Traditionally, inverters simply converted the DC electricity generated by PV modules to the AC electricity we use in our homes. More recently, inverters have evolved into remarkably sophisticated devices to manage and condition power. Many new inverters contain all the protective relays, disconnects, and other components necessary to meet the most stringent national standards. Two of these standards are particularly relevant: Institute of Electrical and Electronic Engineers, P929: Recommended Practice for Utility Interface of Photovoltaic Systems. Institute of Electrical and Electronic Engineers, Inc., New York, NY (1998).
# Underwriters Laboratories, UL Subject 1741: Standard for Static Inverters and Charge Controllers for Use in Photovoltaic Power Systems (First Edition). Underwriters Laboratories, Inc., Northbrook, IL (December 1997).
You don’t need to fully understand these standards, but your PV provider and utility should. It is your obligation to make sure that your PV provider uses equipment that complies with the relevant standards, however, so be sure to discuss this issue.
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Some utilities offer customers with PV systems the option to net meter the excess power generated by the PV system. This means that when the PV system generates more power than the household can use, the utility pays the full retail price for this power in an even swap as the electric meter spins backward, and your PV power goes into the grid.
Net metering allows eligible customers with PV systems to connect to the grid with their existing single meter. Almost all standard utility meters can measure the flow of energy in either direction. The meter spins forward when electricity is flowing from the utility into the building and spins backward when power is flowing from the building to the utility.
For example, in one utility program, customers are billed monthly for the "net" energy consumed. If the customer’s net consumption is negative in any month (i.e., the PV system produces more energy than the customer uses), the balance is credited to subsequent months. Once a year, on the anniversary of the effective date of the interconnection agreement, the utility pays the customer for any negative balance at its wholesale or "avoided cost" for energy.
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Net metering allows customers to get more value from the energy they generate. It also simplifies both the metering process (by eliminating the need for a second meter) and the accounting process (by eliminating the need for monthly payments from your utility). Be sure to ask your utility about its policy regarding net metering.
Under the federal Public Utility Regulatory Policies Act (PURPA), utilities must allow you to interconnect your PV system. They must also buy any excess electricity you generate, beyond what you use in your home or business. If your utility does not offer net metering, it will probably require you to use two meters: one to measure the flow of electricity into the building, the other to measure the flow of electricity out of the building. If net metering is not available, the utility will pay you only a wholesale rate for your excess electricity. This provides a strong incentive to use all the electricity you generate so that it offsets electricity you would otherwise have to purchase at the higher retail rate. This may be a factor in how you optimize the system size, because you may want to limit generating excess electricity. Such a "dual metering" arrangement is the norm for industrial customers who generate their own power.
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What should you know about utility and inspection sign-off?
After your new PV system is installed, it must be inspected and "signed off" by the local permitting agency (usually a building or electrical inspector) and most likely by the electric utility with which you entered into an interconnection agreement. Inspectors may require your PV provider to make corrections (which is fairly common in the construction business). A copy of the building permit showing the final inspection sign-off may be required to qualify for a solar rebate program.
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For More Information see: "What You Should Know About Permits