Net metering - Which kind do you mean?

This blog is to help customers become aware of the opportunities for private, residential generation of electricity.

"Net metering" is, by now, a well-recognized phrase. However, its implementation can be very complicated, and there are variations from state to state. In Pennsylvania, for example, there are two different kinds of  "net metering". Utility companies, generally, have accepted the first kind, known as "physical" net metering, but they have aggressively restricted the second type, "virtual" net metering or "virtual meter aggregation" as it's called in Pennsylvania law.

Electric Utility Companies have blocked virtual net metering by imposing arbitrary rules that circumvent the law. That is precisely what my current legal case is about, and I'll elaborate on that as the case proceeds.

For now, here's a quick summary of the two kinds of net metering. If you picture solar panels on a roof, you're probably thinking of physical net metering. In physical net metering, there is one meter called a "bi-directional" meter. The solar panels and the house's circuitry are both wired into the single meter. The meter cycles one direction when the generation exceeds usage, and it reversed direction when usage exceeds generation. At the end of each month, the meter shows a "net" reading, producing either a credit or a charge for the billing period.

It can get more complicated, with spikes in spot pricing, peak-generation credit, and other market-related variables, but that's the basic idea.

The second type of net metering is "virtual" net metering. In this form of net metering, a separate meter is installed for the PV solar panels, wherever they are located. Often, the building of a roof is not suitable, either because of the angle or because it is shaded. Obviously, the solar panels should be installed where the sunlight is greatest. If a customer has no suitable siting, he/she can lease land from a neighbor. The location, according to Pennsylvania law must be within two miles of the usage meter or meters. The separate meters, then, are read and "aggregated" each month. The law (The AEPS Act of 2004) suggests that these multiple meters will be aggregated in a single account. In some cases, the solar panels may supply several different meters on separate sites or buildings.

So, why would the Utility Companies want to defy this part of the law, when the provision is so explicit?

We'll consider that question in a later blog.

Comments are welcome.