Colorado
Incentives/Policies for Renewable Energy
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Last DSIRE Review: 09/18/2009
| Incentive Type: |
Net Metering |
| State: |
Colorado |
| Eligible Renewable/Other Technologies: |
Solar Thermal Electric,
Photovoltaics,
Wind,
Biomass,
Hydroelectric,
Geothermal Electric,
Recycled Energy,
Small Hydroelectric,
Fuel Cells using Renewable Fuels
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| Applicable Sectors: |
Commercial,
Industrial,
Residential
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| Applicable Utilities: | All utilities (exceptions for small municipal utilities)
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| System Capacity Limit: | IOU customers: 120% of the customer's average annual consumption.
Muni and co-op customers: 25 kW for non-residential & 10 kW for residential
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| Aggregate Capacity Limit: | No limit specified
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| Net Excess Generation: | Credited to customer's next bill at retail rate.
IOUs pay customers at end of calendar year at average hourly incremental cost, or customer may opt for indefinite roll-over
Munis and co-ops provide annual reconciliation at a rate they deem appropriate. |
| REC Ownership: | Customer owns RECs (must be relinquished to utility for 20 years in exchange for incentives)
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| Meter Aggregation: | Not addressed
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Authority 1:
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C.R.S. 40-2-124
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Authority 2:
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4 CCR 723-3, Rule 3664
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| Date Enacted: | 12/15/2005 |
| Date Effective: | 7/2/2006 |
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Authority 3:
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C.R.S. 40-9.5-118
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Authority 4:
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SB 51
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| Date Enacted: | 4/22/2009 |
| Date Effective: | 9/1/2009 |
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Authority 5:
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PUC Decision C09-0990
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| Date Enacted: | 9/2/2009 |
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Summary:
Senate Bill 51 of April 2009, made several changes, effective September 1, 2009, to the net metering rules for investor-owned utilities as they apply to solar electric systems. These changes include shifting the maximum system size for solar electric systems from 2 MW to 120% of the annual consumption of the site; redefining a site to include all contiguous property owned by the consumer; and allowing system owners to make a one-time election in writing to have their annual net excess generation carried forward as a credit from month to month indefinitely, rather than being paid annually at the average hourly incremental cost for that year. The Colorado Public Utilities Commission (PUC) incorporated these changes in the final rules they adopted in September 2009. While SB 51 dealt explicitly with solar electric systems, the final rules pertain to all eligible energy resources listed above.
Systems sized up to 120% of the customer's annual average consumption that generate electricity using qualifying renewable-energy resources are eligible for net metering in IOU service territories. Municipal and cooperative utilities are subject to lesser capacity-based maximums as described below. Electricity generated at a customer's site can be applied toward meeting a utility’s renewable-generation requirement under Colorado's renewable portfolio standard (RPS), though the renewable electricity certificates remain with the net metering customer unless purchased by the utility. The RPS mandates that 4% of the renewables requirement be met with solar energy; half of this percentage must come from solar electricity generated at customers' facilities.
Any customer's net excess generation (NEG) in a given month is applied as a kilowatt-hour (kWh) credit to the customer's next bill. If in a calendar year a customer's generation exceeds consumption, the utility must reimburse the customer for the excess generation at the utility's average hourly incremental cost for the prior 12-month period. Net metering customers of an IOU may make a one time election in writing on or before the end of the calendar year to have their NEG carried forward from month to month indefinitely. If the customer chooses this option, they will surrender all their kWh credits if and when they terminate service with their utility.
If a customer-generator does not own a single bi-directional meter, then the utility must provide one free of charge. Systems over 10 kilowatts (kW) in capacity require a second meter to measure the output for the counting of renewable-energy credits (RECs). Customers accepting IOU incentive payments must surrender all renewable energy credits (RECs) for the next 20 years. Cooperative and municipal utilities are free to develop their own incentive programs at their discretion but they are not subject to the solar-specific requirements of the RPS.
House Bill 08-1160, enacted in March 2008, requires municipal utilities with more than 5,000 customers and all cooperative utilities to offer net-metering. The new law allows residential systems up to 10 kW in capacity and commercial and industrial systems up to 25 kW to be credited monthly at the retail rate for any net excess generation their systems produce. Co-ops and municipal utilities are authorized to exceed these minimum size standards. The statute also requires the utilities to pay for any remaining NEG at the end of an annual period but does not define what the annual period is, nor the rate at which it will be paid. The law says the utilities will make a payment based on a "rate deemed appropriate by the utility". The new law also required the PUC to open a new rulemaking to determine if the existing interconnection standards adopted in 4 CCR 723-3, Rule 3665 should be modified for co-ops. Municipal utilities are required to adopt rules “functionally similar” to the existing PUC rules, but may reduce or waive any of the insurance requirements.
Background:
In December 2005, the Colorado Public Utilities Commission (PUC) first adopted standards for net metering and interconnection, as required by Amendment 37, a renewable-energy ballot initiative approved by Colorado voters in November 2004.
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Please note: The information on the DSIRE web site provides an overview of incentives and other policies, but it should not be used as the only source of information when making purchasing decisions, investment decisions, tax decisions or other binding agreements. Please refer to the individual contact provided in each record to verify that a specific incentive or other policy is applicable to your specific project.
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