One of the advantages of going solar for residential and commercial customers is the opportunity to get paid for the energy they generate. This is called net metering, when those customers push the electricity they aren’t using back onto the grid and receive a credit from their utility. Those customers are only billed for the “net” energy used each month.
The large majority of states and territories have passed net metering laws. There are a handful of states that have some form of compensation for distributed generation but it is not explicitly labeled as net metering. Three states (Alabama, South Dakota, Tennessee) offer no form of net metering or compensation.
States/territories that have mandated net metering for certain utilities
Congratulations. If you live/work in one of these 33 states, D.C., or four territories, you are able to take advantage of net-metering credits in some form. View the database on DSIRE for more details about your specific region.
U.S. Virgin Islands
States that are transitioning to compensation other than net metering
Five states (California, Illinois, Indiana, Kentucky, Michigan) do currently have net-metering credits, but they are transitioning into a different form of compensation.
Illinois: The Climate and Equitable Jobs Act removed the 5% aggregate cap on net metering and replaced it with a date of December 31, 2024, or when utility tariffs setting new compensation values are approved, whichever is later.
Indiana: The state began a phase-down of the retail rate compensation for residential customers in 2017. The retail rate will be phased out completely by July 2022, but certain utilities like Vectren still offer net metering.
Kentucky: Effective January 2020, the state requires the Public Service Commission to set crediting structures for each utility based on dollar value rather than kilowatt-hour netting.
Michigan: Net metering has been phased out for a new methodology that reflects “cost of service.” Individual utilities now choose what they will pay for distributed generation.
States with mandatory compensation other than net metering
Seven states (Arizona, Georgia, Hawaii, Louisiana, Mississippi, New York, Utah) do offer compensation but not through net metering.
Arizona: State practices “net billing,” where new customers are credited for energy exported to the grid.
Georgia: The state allows but does not require net metering adopted by utilities. In a 2019 rate case, the Georgia Public Service Commission required Georgia Power to offer net metering to 5,000 rooftop solar customers or 32 MW of capacity, whichever comes first.
Hawaii: Two tariffs are offered: Customer Grid Supply Plus and Smart Export. The CGS Plus Tariff is a first-come, first-served credit until the utility’s capacity limit is met. The Smart Export tariff is for solar + storage systems. Customers must use excess generation to charge their batteries during the daytime and use that stored electricity in the evening. Any extra electricity exported to the grid during the overnight hours will receive a bill credit.
Louisiana: Utilities are required to continue to accept net metering applications until a cap is met.
Mississippi: Any electricity exported to the grid is not credited against the customer’s monthly electricity use. Instead it is credited at a less-than retail rate.
New York: The New York Public Service Commission adopted a value of distributed energy resource (VDER) tariff in July 2020 for projects interconnected beginning on January 1, 2022. The successor tariff retains the same overall structure as the Phase One NEM tariff adopted in 2017, but adds a “Customer Benefit Contribution” (CBC) charge intended to cover the costs of state-funded programs.
Utah: Net metering has been capped, and any new customers through 2032 will have export credits determined by the utility.
States with no mandates, but some utilities offer net metering
Both Idaho and Texas do not have mandatory state-wide net metering, but some utilities within the state offer compensation.
Updated in April 2022