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As net metering use rises, a battle brews in California

Participation in net metering, which gives consumers financial credit for the renewable energy they generate, is on the rise. In California, solar and utilities are clashing over the program.
Written by Kirsten Korosec, Contributor on

Net metering, a program where utilities give consumers financial credit for the renewable energy they generate and feed back to the grid, is on the rise in the United States, according to data recently released by the Energy Information Administration. And at least in California, the popular program has become a battleground between the solar rooftop industry and utilities.

According to the EIA,  customer participation in net metering between 2003 and 2010 had an average annual growth of 56 percent. That growth was especially high between 2009 and 2010 when it rose 61 percent. The popularity of net metering was driven by state policies and technological developments, which encouraged residential and business consumers to install small-scale, on-site renewable energy generators including rooftop solar, wind and home fuel cells.

These customers receive a financial credit for power generated by their system and fed back into the utility. The credit is used to offset the customer's electricity bill during periods of higher energy use. For example, a homeowner with rooftop solar may receive a credit from their utility during sunny summer months when they generate more energy than they can use. The credit would be used to offset utility-generated electricity in the winter.

Despite the growth, the tiniest sliver of Americans use net metering. Electric customers with net metering represented only 0.1 percent of all customers in 2010, the EIA said. And the vast majority of those customers are in California. Of the 155,841 net metered customers in the U.S., 56 percent were in California. The next largest states were Colorado with 9,776 and Arizona with 8,559 net metered customers.

Utilities and the solar rooftop industry continue to fight over the future of net metering in California. The latest battle is over a proposal by California Public Utilities Commission to change how net metering is calculated.

California's major utilities are required by state law to make net metering available to customers. However, the program is capped at 5 percent of the utility's peak demand. Once a utility hits the cap, it doesn't have to sign new net metering contracts. There's been considerable debate over whether utilities were using the proper methodology to calculate the cap, according to a lengthy report by Greentech Media which delves into the proposal in greater detail.  Last month, CPUC President Michael Peevey determined that investor-owned utilities are calculating the cap contrary to the plain language and intent of the law.

Peevey's proposal would require utilities to calculate peak load for each individual customer and then add them all together. This would effectively double the cap to more than 10 percent within Pacific Gas & Electric's territory, according to a San Jose Mercury News report. The CPUC is expected to make a decision May 24.

Photo: Stock.xchng user linder6580

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This post was originally published on Smartplanet.com

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