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What is Net Metering and how does it affect us.

Net metering is an electricity policy for consumers who own (generally small) renewable energy facilities, such as wind, or solar power. "Net", in this context, is used in the sense of meaning "what remains after deductions" -- in this case, the deduction of any energy outflows from metered energy inflows. Under net metering, a system owner receives a credit for at least a portion of the electricity they generate. Most electricity meters accurately record in both directions, allowing a no-cost method of effectively banking excess electricity production for future credit. Most net metering laws involve monthly roll over of kwh credits, a small connection fee, require monthly payment of deficits (i.e. normal electric bill), and annual settlement of any residual credit. Net metering regulations vary among the states.

It is important to note that the term Net Metering does not mean selling excess electricity back to the utility. Net Metering can be thought of as 'banking' electricity that you produce when you do not need it, in order to 'withdraw' that electrcicty back from the grid when you do need it.

Net-metering actually refers to the billing process under which the utility charges you only for your net usage in a given period. In other words, you get a full value credit for the power you store in the grid, and at the end of the period you pay only for any excess that you draw over your production.

Denoted below is the state of Net metering in Ohio right now. The 1% penetration factor was primarily to protect utilitys from having to absorb more energy than their systems can handle. The introduction of Smart Grid, and Smart Meters will effectively remove this cap. In concert with regulatory changes - which are virtually assured - Smart Grid and Smart meters will open the possiblity of send much larger amounts of energy back to the utility, as well as the ability to SELL any excess energy - (IF more energy is generated than consumed over a set period of time) back to the Utility.

Incentive Type: Net Metering
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Fuel Cells, Microturbines
Applicable Sectors: Commercial, Industrial, Residential
Limit on System Size:No limit specified (system must be sized to match some or all of customer's load)
Limit on Overall Enrollment:1% of a utility's peak demand
Treatment of Net Excess:Credited at utility's unbundled generation rate to customer's next bill; customer may request refund of NEG credits accumulated over a 12-month period
Utilities Involved:All electric distribution utilities and competitive retail electric service providers
Interconnection Standards for Net Metering?Yes
Authority 1: ORC 4928.67
Date Enacted:07/06/1999; amended 07/31/2008
Effective Date:07/06/1999
Authority 2: OAC 4901:1-10-28
Date Enacted:04/06/2000; amended, 3/28/2007
Effective Date:09/18/2000
Authority 3: OAC 4901:1-21-13
Date Enacted:04/06/2000; amended, 3/28/2007
Effective Date:09/18/2000

Note: Legislation enacted in May 2008 (S.B. 221) amended Ohio's net metering law by: (1) removing the 1% aggregate capacity limit for all customer-generators, and (2) removing all limitations related to energy generation technology and system size on systems sited at hospitals. In November 2008 the Public Utilities Commission of Ohio issued a rulemaking order making revisions to the existing rules consistent with the amendments.

Under the new rules, all hospital facilities -- including those already in service -- are eligible for net metering under a dual-metering tariff separate from that offered to other net metering customers. Strangely, the revised rules for hospitals appear to allow them to both reduce their electricity bills by the amount of electricity generated and used on-site, and receive avoided cost payments from the utility for the total amount of electricity generated by a system. The final rules must undergo additional administrative review before taking effect (~75 days).

Prompted by the federal Energy Policy Act of 2005 (EPAct 2005,) the Public Utilities Commission of Ohio (PUCO) adopted revised standards for net metering in March 2007. Ohio’s original net-metering law was enacted in 1999 as part of the state’s electric-industry restructuring legislation.


Ohio's net-metering law requires electric distribution utilities and competitive retail electric service providers to offer net metering to customers who generate electricity using wind energy, solar energy, biomass, landfill gas, hydropower, fuel cells or microturbines. Although there is no stated capacity limit on an individual net-metered energy system in Ohio, PUCO has ruled that "an implied limitation" is in effect because, by statute, a net-metered system must be "intended to offset part or all of the customer-generator's electricity requirements." However, each utility is only required to offer net metering until the total generating capacity of all participating customers equals 1% of the utility's aggregate customer peak demand in Ohio.


Initially, the Public Utilities Commission of Ohio (PUCO) required utilities to credit customer net excess generation (NEG) at the utility's full retail rate. However, in June 2002, the Ohio Supreme Court decided that this exchange was illegal (Case No. 01-0573) and ruled that each utility must credit NEG to the customer at the utility's unbundled generation rate. In March 2007, PUCO revised its rules to allow net-metered customers to request refunds of net excess generation (NEG) credits accumulated over a 12-month period. Previously, a customer could request a refund only after three consecutive months of NEG accumulation. This new rule went into effect October 22, 2007.


Net-metered systems must meet safety standards specified by the National Electrical Code (NEC), the Institute of Electrical and Electronics Engineers (IEEE), and Underwriters Laboratories (UL). Utilities may not require customer-generators to comply with additional safety and performance standards.