Examining Interconnection and Net Metering Policy for Distributed Generation in the United States

Abstract

Following requirements of the Energy Policy Act of 2005, most U.S. states require utility companies to adopt interconnection and net metering policies, allowing customers to become prosumers who both consume and produce electricity, generating electricity using distributed renewable energy technologies, connecting to the existing electric utility grid and receiving compensation for excess electricity generation. This paper reviews existing interconnection and net metering policies instituted by investor owned utilities (IOUs) across the U.S., specifically focused on policies regulating installations of small scale, residential or Tier 1 (a term used to indicate policies applicable to smaller scale rather than larger scale, although the size at which DG systems are classified as either Tier 1 or higher tiers varies by utility). Publicly available data from each IOU reveal inconsistencies in interconnection and net metering policies, within states and even within individual companies. In addition, accurate information is often unavailable to consumers. Perhaps most importantly, results suggest that compensation for excess distributed generation often lacks transparent articulation in utility policy. The results of this study provide important insight into interconnection and net metering policies for distributed renewable energy generation, as states and utilities continue to modify interconnection and net metering policies in response to increased adoption of distributed renewable energy systems.