Net Metering

Net metering allows customers with eligible renewable energy systems to receive bill credits for all power generated up to 125 percent of the on-site consumption during a billing period. Public entities (municipal, state, quasi-state) are allowed to enter into virtual net metering arrangements with renewable energy developers for up to 10 MW per project site.

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Net metering requires electric distribution companies to credit power produced by renewable energy systems installed behind a customer meter. To participate in net metering, a renewable energy system must be sited on the customer’s premises, with certain “virtual net metering” exceptions for public sector projects, farms, affordable housing, and residential projects. Eligible customer-sited systems must be sized to meet on-site loads, based on a three-year average of electricity consumption at the property. Customers receive credit at the electric distribution company’s avoided cost rate for excess generation produced by a net-metered system, up to 125 percent of the customer’s own consumption during a billing period. Net metering was enacted in 2011; the state limit on net metering, formerly 3 percent of the electric distribution company’s historical peak load (1,932 MW as of 2013), was removed in 2014.

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