| State: |
California |
| Incentive Type: |
Net Metering |
| Eligible Renewable/Other Technologies: |
Photovoltaics, Wind, Fuel Cells, Biogas from manure methane production or as a byproduct of the anaerobic digestion of biosolids and animal waste |
| Applicable Sectors: |
Commercial, Industrial, Residential, Agricultural |
| Applicable Utilities: | All utilities (except LADWP): solar and wind;
Investor-owned utilities: solar, wind, biogas and fuel cells
|
| System Capacity Limit: | 1 MW (10 MW for up to 3 biogas digesters)
|
| Aggregate Capacity Limit: | 2.5% of utility's peak demand (statewide limit of 50 MW for biogas digesters; 112.5 MW for fuel cells);
See below for explanation of PG&E's modified cap.
|
| Net Excess Generation: | Credited to customer's next monthly bill at retail rate.
After 12 month period, customer may opt to have net excess generation roll over indefinitely, or to have the utility pay for any net excess at a rate to be determined by the rate making authority. If customer makes no affirmative decision, net excess generation will be granted to utility with no compensation. |
| REC Ownership: | Customer owns RECs.
If customer receives payment for remaining net excess generation at the end of a 12 month cycle, utility owns the RECs associated with the net excess electricity purchased.
|
| Meter Aggregation: | Virtual meter aggregation on multi-family affordable housing allowed
|
Pacific Gas & Electric (PG&E) filed an advice letter with the California Public Utilities Commission in November 2009 stating that it would voluntarily raise its cap on the aggregate capacity of net metered systems from 2.5% to 3.5% of their peak demand. It had been projected that PG&E would reach the 2.5% threshold before the net metering rules could be amended.
California's net-metering law, which took effect in 1996, requires all utilities, with one exception* to offer net metering to all customers for solar and wind-energy systems up to 1 megawatt (MW). Investor owned-utilities are additionally required to offer net metering for biogas-electric systems and fuel cells.
The original law applied to wind-energy systems, solar-electric systems and hybrid (wind/solar) systems. In September 2002, legislation (AB 2228) allowed biogas-electric facilities up to 1 MW to net meter until December 31, 2005, under a pilot program. This pilot program was extended until December 31, 2009, upon the enactment of AB 728 in September 2005. A customer-generator may continue to net meter an eligible biogas digester for the life of the facility, provided the digester meets California's best available control technology (BACT) requirements upon installation. Furthermore, AB 728 (2005) authorizes up to three large biogas digesters -- systems with a capacity greater than 1 MW but no more than 10 MW -- to net meter. There is a 50-MW statewide limit on net-metered biogas digesters. California law provides for retail cost recovery of revenue loss from net-metered biogas digesters.
Other legislation enacted in October 2003 (AB 1214) made fuel cells eligible for net metering until the cumulative rated generating capacity of net-metered fuel cells reaches 45 MW within the service territory of a utility with a peak demand of at least 10,000 MW, or until the capacity reaches 22.5 MW within the service territory of a utility with a peak demand of 10,000 MW or less. The maximum total capacity of all net-metered fuel cells in all service territories is limited to 112.5 MW. The repeal date for this provision, January 1, 2006, was removed by AB 67 2005. Previously restricted to fuel cells that begin operation before January 1, 2010, AB 1551 of 2009 extended the eligibility deadline to make fuel cells installed prior to January 1, 2014 eligible for net metering.
Legislation enacted in 2006 (SB 1) increased the aggregate limit of net-metered systems in a utility's service territory from 0.5% to 2.5% of the utility's aggregate customer peak demand. (Previously, both SDG&E and PG&E were rapidly approaching their 0.5% limits.)
Net excess generation (NEG) is carried forward to a customer's next bill. Under prior law, any NEG remaining at the end of each 12-month period was granted to the customer's utility. AB 920 of 2009 gave net metering customers two additional options for the NEG remaining after a 12 month period. Customers have the option of rolling over any remaining NEG from month-to-month indefinitely, or they can receive financial compensation from their utility for the remaining NEG. By January 1, 2011, the California Public Utilities Commission (CPUC) must develop a compensation valuation for the remaining NEG if customers choose the financial compensation option. The rate making authorities of publicly-owned utilities must develop their own compensation method for the remaining NEG through a public proceeding. By January 31, 2010, utilities must notify all of their net metering customers of these new options. If the customer makes no affirmative election for either option, the utility will be granted their NEG at the end of the 12 month period with no compensation to the customer.
The renewable energy credits (RECs) associated with the electricity produced and used on-site remain with the customer-generator. If, however, the customer chooses to receive financial compensation for the NEG remaining after a 12 month period, the utility will be granted the RECs associated with just that surplus they purchase.
California does not allow any new or additional demand charges, standby charges, customer charges, minimum monthly charges, interconnection charges, or other charges that would increase an eligible customer-generator's costs beyond those of other customers in the rate class to which the eligible customer-generator would otherwise be assigned. The CPUC has explicitly ruled that technologies eligible for net metering (up to 1 MW) are exempt from interconnection application fees, as well as from initial and supplemental interconnection review fees.
Publicly owned utilities may elect to provide co-energy metering, which is the same as net-metering, but incorporates a time-of-use rate schedule. Customer-generators with systems sized between 10 kW and 1 MW who are subject to time-of-use rates are entitled to deliver electricity back to the system for the same time-of-use (including real-time) price that they pay for power purchases. However, time-of-use customers who choose to co-energy meter must pay for the metering equipment capable of making such measurements. Customer-generators retain ownership of all renewable-energy credits (RECs) associated with the generation of electricity they use on site.
Additional Resources:
* Publicly-owned electric utilities with more than 750,000 customers which also provide water are exempt from offering net metering. Los Angeles Department of Water and Power (LADWP) is the only utility that falls in this category.
