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.
Alaska
American Samoa
Arkansas
Colorado
Connecticut
Delaware
Florida
Guam
Iowa
Kansas
Maine
Maryland
Massachusetts
Minnesota
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
U.S. Virgin Islands
Vermont
Virginia
Washington
Washington, D.C.
West Virginia
Wisconsin
Wyoming
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.
California: In 2020, the California Public Utilities Commission started creating a successor program to NEM 2.0. Commissioners are still working out the details of NEM 3.0.
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
I didn’t realize how good I have it in Colorado. Xcel Energy uses net metering and allows the solar customer (me) to combine it with their Time of Use (TOU) rate structure. I keep my electrical usage to a minimum during “ON-PEAK” times, and wait until “OFF-PEAK” times for any activities that require lots of electricity, like doing the laundry or running the dishwasher. The OFF-PEAK rate is about a third of what the ON-PEAK rate is, and the hours when the ON-PEAK rates apply correspond fairly well with the hours that my solar panels are producing the most electricity. I end up selling much of the electricity my solar panels generate to Xcel Energy for almost three times the rate that I’m paying them for the electricity that I use late at night.
When they first offered the TOU rate plan, the ON-PEAK hours matched my peak solar production hours almost perfectly. So for the first two years, my Xcel bills (including both gas and electric) for May through October almost always had a credit balance (meaning Xcel owed me money). Then they shifted the ON-PEAK hours so that they only correspond with about half of my peak solar production hours. But I can’t complain, especially knowing that some states don’t allow net metering at all.
Is there a report that conveys what percentage, per state, the percentage that power company will bank/buy back power.
The bottom line of concern should be: At what cost per KWH are the utilities and the average home owner or small business able to produce electricity? If a mass of individual producers are able to
responsibly and reliably produce a KWH of electricity at a lower cost per KWH than their business
model is better than those of the utilities. I can understand at minimum cost per meter to each customer
for providing power at all times, but not so high a minimum that it keeps ‘unhealth’ utility costs alive.
Interestingly enough, with a warning, the almost fully Green Danish system appear to have come with extremely high individual electric costs.
https://paylesspower.com/blog/5-countries-with-really-expensive-electricity/
When we started into the solar energy push, the electric companies were having to pay anyone that had property to generate electric in any manner they wished, then the utility had to pay you for that electric if you owned the property it was generated on. Then along came the utilities that was so damn greedy that they didn’t want to buy that energy because they were getting it for much less than they wanted it known. Now these utilities have gone to paying off the politicians to make laws that banned the purchasing of electric from anywhere or anyone other than their 1 main supplier. THE TIME HAS COME FOR POLITICIANS TO STOP WORKING FOR THEMSELVES, CROOKED COMPANIES AND COUNTRIES AND STARTED WORKING FOR THE ONES THAT PUT THEM IN THAT OFFICE.
is there any state offering biogas net metering?
I think TVA only offers 1.5 cents per kilowatt for your excess solar. I am on Georgia Power and they recently adopted true “net metering” which is great because I have 4000 Watts on my roof. A friend of mine in on TVA power through North Georgia Electric and even though he is going grid tie, he is going to use an Outback Inverter with a 7.5KW battery to help avoid sending any power back to TVA. It just doesn’t make sense to do so. He will self consume during the day, save 7.5KW for use in the evening then the inverter will switch back to the grid when the battery bank gets low, late in the evening. This will minimize what he actually needs to pull from the grid and he won’t sell any power back.
What are you waiting on TENNESSEE? Get with the program…we need Net Metering!!!
Does Tennessee have net metering through the local electrical provider? Or does TVA offer net metering direct to the electrical customer and by pass the local electrical provider?
It’s interesting to see the number of States with net billing in place. We are beginning to transfer into a ‘regulatory’ period where FERC 841 ruling and other “legislative” changes are pushing the use of alternative energy and even energy storage as the future of energy use in the country. There are moves by several electric utilities to enter into the “initiative” process at an attempt to “get the voters” to change their State’s Constitution to protect their “regulated monopolies”. So, far this hasn’t passed, so now the electric utilities are “embracing” installation of their own alternative energy generation and more and more, energy storage systems. Now the “push” is migrating from voter initiatives to court room lawsuits, trying to get rid of net metering and going to (net billing) which would “value” solar PV excess pushed back onto the grid at ‘low’ wholesale. Berkshire Hathaway just weighed in from one of their “utilities” in Colorado saying excess solar PV should be valued at 1.5 cents per kWh while utility electricity should be from 10.5 to 12 cents per kWh. In other parts of the country, California is an example, there are tiered electricity use blocks that are tiered in costs from 16 cents/kWh up to 31 cents/kWh. There are TOU rate spiking programs that increase electricity rates from 16 cents/kwh on a ‘sliding’ scale up to 47 cents/kWh during the TOU rate period, often from 3 PM to 9 PM daily. Now the electric utilities are crying about early morning TOU rate spiking is a “necessity” from around 6 AM to 9 AM during the “early morning wake up” period when a majority of folks get up and get ready for work just before solar PV starts to make good usable power.
These types of programs are pushing folks to add or adopt the solar PV with smart energy storage as a residential “self consumption” system. By the way the utilities are jumping on the “band wagon” with rate spiking and rate tiered electricity use, the home and business owner will have to “consider” larger battery storage units in the usable 48 to 65kWh or try to achieve the extension of the solar PV powered day past that 6 to 8 hour day to 12 to 16 hours. Basically, if the utility wants to ‘allow’ you to get 1/3 the value for your excess energy pushed back on the grid during the day, cut down the need to use the grid only 1/3 of the time for your energy needs. The more the “infighting” amongst the ratepayers and the utilities continues, the more money will be spent on individual residential and small business solar PV systems, the less the “consumer” will need the utility for daily energy requirements. So, the bottom line is where will adoption of the technology, (force) the electric utility industry to change their business model to accommodate all?
What is the rule of solar power in the state of Illinois. I have solar but no way to control the excess power that is created. I would like a battery backup to store some of the energy to use when we are in a blackout. Which we have been in a number of times. But power on across the street from us!!;!!!!!!¡;!!!!!!!!!!!!
Check with your local utility for specific details, but Illinois does have a net metering program.
If you’re looking to take your current existing on-grid system to a more off-grid system to use for backup power, you’ll also need to have the inverter upgraded to a model that will go into “islanding mode”. If you already currently have a grid-interactive inverter, then the moment it detects that your grid power goes out, the inverter will turn itself off. This was a new requirement introduced in 2014 as a safety measure to prevent electric shock to any grid workers that may be trying to fix the local grid. For example, when a worker goes out to the grid to replace a transformer after a lightening strike, your PV system won’t shock them.
You can still use your existing PV modules, but you’ll need to swap out the inverter, and also add on the batteries, load controller, and an automatic transfer switch. Having an automatic transfer switch that works with your load controller will help you in the event your batteries are full, it will allow the excess energy back out onto the grid for any credits you may receive from the utility.