Net Metering

Self-generation 101

Self-generation 101

Interested in producing your own electricity? Let us provide you with general information to assist you in making an informed decision.

If you are an electric utility customer and are interested in generating your own renewable energy to offset your electricity bill, North Carolina law allows you to do so if you meet the following criteria:

  • The renewable energy facility must be intended to offset part or all of your own electricity needs, not to sell electricity to your electric utility;
  • The renewable energy facility must have a capacity of 1 MW or less; and
  • The renewable energy facility must interconnect with the utility’s system pursuant to the current generator interconnection standard and operate in parallel with the utility’s distribution system.

Eligible energy resources include solar, wind, biomass, landfill gas, and hydropower.

What is net metering?

What is net metering?

Net metering is a billing arrangement whereby a customer who generates their own electricity from renewable energy resources can receive a credit on their electric utility bill for any extra electricity produced by the customer that flows back onto the electric utility’s distribution system.

Generating your own electricity may reduce your electric bill in two ways:

  • The electricity you produce displaces electricity you would otherwise have purchased from the electric utility; and
  • Your electricity bill is lowered by the amount of electricity your generating system may feed back onto the utility’s system.
How does net metering work?

How does net metering work?

If you want a net metering billing arrangement, your generating equipment must be connected to your electric utility’s distribution system. While your generating equipment is producing electricity, your home will consume that electricity first, before any is consumed from the grid. Whenever your generating equipment produces more electricity than you need, the extra electricity flows backward through the utility meter on your property.

If you are on a standard rate schedule, the flow of excess electricity backward onto the grid results in a lower monthly meter reading by the electric utility, thus lowering your electric bill. If you are on a time-of-use rate schedule (meaning that you are billed at a higher rate for energy used during on-peak hours, and at a lower rate for energy used during off-peak hours), any excess electricity that flows backward through your meter during on-peak hours will reduce your electric bill at your on-peak rate, and any excess electricity that flows backward through your meter during off-peak hours will reduce your electric bill at your off-peak rate. 

What if the meter runs backward more than it runs forward?

What if the meter runs backward more than it runs forward?

In the case of excess generation, a credit will be noted on your electric utility bill.

What happens to that credit?

What happens to that credit?

The credit can be used to offset charges in future months. However, on June 1 of each year, any unused credit that has accumulated over the previous 12 months is forfeited. This reflects the fact that electricity is more costly in the high-demand summer and winter months than in the cool spring and fall months. For example, excess electricity that you generate and put onto the grid in April does not fully compensate the utility for the electricity that you consume in July, because it costs the utility more to generate that electricity in July than it does in April. If the credits could accumulate indefinitely, it would allow you to treat the grid like an “electricity bank”, and unfortunately the grid does not currently have that type of storage capacity.

Can net metering offset all charges on a customer’s electric utility bill?

Can net metering offset all charges on a customer’s electric utility bill?

The net metering credit is limited primarily to kilowatt-hour (kWh) charges. Other portions of your bill, like the fixed customer charge and the Renewable Energy Portfolio Standard (REPS) charge, cannot be offset by the net metering credit.

Will my generation system produce power if the utility power to my house goes out?

Will my generation system produce power if the utility power to my house goes out?

No.  Due to safety reasons, if the electric service to your home is out, your renewable energy facility will be forced offline. This precaution is to prevent your generation system from feeding excess electricity onto the grid, which would put utility line workers at risk as they repair electrical lines. The only way to supply power to your home with distributed generation during power outages is to invest in an energy storage system and a transfer switch.

Are there any pending changes to net metering rules?

Are there any pending changes to net metering rules?

Yes. House Bill 589, passed in July 2017, requires the largest power utilities in North Carolina (Duke Energy Carolinas, Duke Energy Progress, and Dominion Energy North Carolina) to file revised net metering rates which “shall be nondiscriminatory and established only after an investigation of the costs and benefits of customer-sited generation.” Customers may enter into the existing net metering tariffs until the new rates are approved by the Utilities Commission. Customers on the existing net metering tariff who own their systems may choose to continue receiving service on those rates until January 1, 2027.

What if I am served by a rural electric cooperative or a municipal electric utility?

What if I am served by a rural electric cooperative or a municipal electric utility?

The rates of rural electric cooperatives and municipal electric utilities are not regulated by the Utilities Commission. While they are not required to offer net metering, some may do so. Contact your electric cooperative or municipal utility to find out what they offer.

How do I get started?

How do I get started?

Contact your local electric utility to request an application form for interconnection service for your proposed renewable energy facility. You must complete an application form for your electric utility to review and approve before you attempt to connect to their system.

The interconnection review process varies based on the amount of electricity you intend to produce and the location of your equipment on the electric utility’s system. Your installer can help walk you through these forms.