Net Metering/Remote Net Metering and Interconnection

Renewable energy systems can be grid-connected (connected to the utility electrical grid), or they can work independent from a utility's electricity distribution system (off-grid). Only grid-connected renewable energy systems that are connected on the customer’s side of the electric meter are eligible for NYSERDA’s Customer Sited Tier incentive programs.

For a renewable energy system to be grid-connected, there must first be an interconnection agreement between customer and the utility company. The interconnection agreement sets the terms and conditions under which a renewable energy system can be safely connected to the utility grid and outlines metering arrangements for the system.

Net Metering and Remote Net Metering

In a conventional net metering situation, a customer-sited renewable energy system is connected to the utility grid through a customer’s utility meter. This is known as “behind-the-meter generation.” At any given moment, if the site is using more electricity than the system is producing, all the electricity produced by the system is used on-site and the site’s electricity needs are supplemented from the grid. If the site is using less electricity than the system is producing, the excess electricity is exported to the grid and the customer receives a credit. This is typically recorded as negative use and is commonly referred to as the “meter spinning backwards.” At the end of the billing cycle, the grid-supplied electricity and the credits for any exported electricity are reconciled, and any surplus credits can be carried forward to the next billing cycle. The specifics of net metering are dependent on the customer’s service classification. Customers who are eligible for Remote Net Metering may apply those credits to other accounts.

On June 1, 2011, New York expanded behind-the-meter generation and established Remote Net Metering for renewable energy systems to allow the electricity generated to be distributed among many utility accounts. Utilities must now allow farm and non-residential customers the ability to apply the excess net metering credits they earn under Net Metering to other accounts they own. The account to which the renewable energy system is connected is called the Host Account and must be a commercial or a farm account. Residential customers cannot take advantage of remote net metering as the host turbine site. The account or accounts that will receive the excess net metering credits are called the Satellite Account(s). A satellite account cannot be a net metered account (i.e. a renewable energy source is already connected to it), but it may be a residential account. All accounts must be in the same name, from the same service utility, and reasonably close to each other. The individual utility tariff spells out the meaning of these concepts.

At the end of each billing cycle, the utility will convert the excess net metering credits (kWh) to dollars by using the host account's electric rate. The customer makes a determination of what percentage of excess generation is applied to each satellite account and what portion (if any) is kept as a rolling credit with the host account. These percentages and the satellite accounts may be changed, but only once per year. There is no annual true-up and the utility will not issue a check for excess energy, just credits.

An example: A farm has a commercial electrical account for their dairy operation and the farm house is close by and has a residential account. They have a wind turbine connected through the barn and they have applied for remote net metering with 100% of the credits to be applied to the home. The farm typically uses 3,000 kWh per month. In January, the turbine generated 3,800 kWh, 800 kWh more than the dairy operation used. All of the farm’s electricity use was offset by the wind turbine, and the excess 800 kWh was converted into a dollar value which then was credited to the satellite account, the farm house. This account is billed at a rate of $.12/kWh. The utility will apply a credit of $96 to the residential account for the farm house. The farm still has to pay the basic service charge for each meter; their electric bills will not equal $0.