What are net metering caps?
What is the System of Assurance of Net Metering Eligibility?
Do all utilities allow customers to net meter?
What is distributed generation (DG)?
Distributed generation (DG) is any electricity generating technology installed by a customer or independent electricity producer that is connected at the distribution system level of the electric grid. This includes all generation installed at sites owned and operated by utility customers, such as a solar photovoltaic systems serving a house or a cogeneration (or CHP) facility serving a college or university. It also covers any commercial-scale or net-metered generation that is connected to the grid at the distribution level (as opposed to the transmission level).
How does the electric grid work?
The conventional electric grid is a web of interconnected circuits that move electricity from generators (power plants that produce electricity) to customers. The parts of the grid are as follows:
- Generator: Produces electricity, typically at large, central power plants
- Transmission system: Transmits large amounts of electricity from generators over high-voltage wires to the distribution system
- Distribution system: Reduces the voltage of electricity from the transmission system through substations and distributes it over lower-voltage wires to individual customers within a region. A local utility (Unitil, Western Massachusetts Electric Company, National Grid, NSTAR, or a municipal utility) owns and operates these wires.
- Customer: At the customer site, electricity is stepped down again through a transformer. A meter measures how much electricity each customer is using.
Traditionally, the movement of electricity through the grid has been in one direction, from a centralized generator to the customer. With the advent of small generation technologies that can be installed by a utility customer, electricity is now moved in both directions. A generator can be installed on a customer site (behind the meter) and interconnected with the distribution system, which allows electricity from the customer's generator to flow to the utility and for electricity to flow from the utility to the customer when the customer's generator is not producing as much electricity as the customer needs.
How do I know if my system is considered distributed generation?
If you are a customer installing equipment to generate electricity at your home, business, or other privately owned property, you are installing distributed generation. If you plan to connect this system to the electric grid, you will need to follow the utility's interconnection process.
Larger systems installed by developers may also be considered distributed generation if they are connected to the distribution system rather than the transmission system. In these cases, the developer will need to engage in discussion with the utility to determine whether this type of interconnection is appropriate for the project.
Why install a grid-connected system?
The main benefit of installing a grid-connected distributed generation system is the assurance of receiving power from the utility when your system is not producing as much power as you need. This is essential for many renewable technologies like solar and wind, which produce intermittent power, and for other technologies that may need to be shut down for periodic maintenance.
While some customers install distributed generation as a primary source of power, others may install distributed generation as backup generation for critical electric loads when the utility is not able to provide power due to storms, blackouts, or other unexpected events.
An additional potential benefit for some small generators is the ability to sell power back to the utility. In Massachusetts, certain generators are eligible for net metering, where the customer receives payment for unused power that is fed back into the distribution system. The size threshold for net metering varies; for example, for some technologies and situations, net metering may be allowed up to 2 MW. Eligibility varies by technology and project owner. For public entities installing wind or solar systems, the cap is 2 MW per unit. For private entities installing wind or solar, the cap is 2 MW per project. In some cases, larger generators may also establish power purchase agreements with their utility.
What are my other options?
The alternative to a grid-connected system is an off-grid system, where the generator serves all or an isolated part of the electric load on site. Off-grid systems can make economic sense for sites that are far from existing utility lines. An off-grid system connected to an isolated load may also be necessary if the site is located on a utility's area network, where interconnection is challenging. Area networks are high-density or high-load areas where power flows through a complex web of power lines that connect to individual customers through multiple paths.
A second option is to interconnect a system to the transmission level of the grid. However, this process typically is longer and requires more documentation than interconnection to the distribution system. It is typically only considered by large generators.
What are radial and network distribution systems?
There are two types of distribution systems: radial systems and network systems. Radial systems, which are more common, deliver power to each customer in a single path from source to load. Interconnection is more straightforward on radial systems. In network systems, power flows through a complex web of power lines that connect to individual customers through multiple paths. DG systems proposed for network systems must use the Standard review path; they are not eligible for the Simplified or Expedited paths.
Network systems are typically found in high-density or high-load areas. Network systems serve portions of the following cities: Boston, Brockton, Cambridge, Fitchburg, Greenfield, Lynn, New Bedford, Pittsfield, Springfield, West Springfield, and Worcester.
What is the interconnection process?
All of the investor-owned utilities in Massachusetts (National Grid
, Western Massachusetts Electric Company
) must follow the same interconnection process, as required by tariffs regulated by the Department of Public Utilities. This interconnection process includes the steps to obtain approval from your local utility (or distribution company) to connect a distributed generation system to the electric grid (or distribution system). Municipally owned facilities are not required to follow this same process and may use different criteria for review. When you apply to an investor-owned utility for interconnection, the utility reviews your project to make sure there are no negative impacts on the grid. If potential impacts are identified, the utility will request additional review and in some cases will require you to pay for new equipment to protect the grid. Additional reviews and equipment upgrades are not usually necessary for most small renewable generators, but may be required for larger projects, more complex projects, or generation that is located on a network system (a high-density or high-load area where power flows through a complex web of power lines that connect to individual customers through multiple paths.)
Please see your utility's interconnection tariff (click the link then look in the right sidebar) for the details of the process and the requirements for interconnection. The tariff includes information regarding technical operating requirements, metering, and billing options. Each utility's tariff is based on uniform statewide standards approved by the Department of Public Utilities, which were updated in 2009 and are being updated again in early 2013.
Why do I need to apply for interconnection?
Whether you are selling power back to the utility or using it all on-site, a distributed generation system will alter your electric load and the one-way flow of electricity from utility to customer. This presents potential risks to the safety of utility workers, performance of the grid and power quality for other customers. To ensure these risks do not exist or are sufficiently mitigated for a specific project, the local utility must review and approve each proposed grid-connected distributed generation project before it is installed.
The interconnection standards implemented by the Massachusetts DPU require every customer installing distributed generation to obtain approval from the local utility before installing and turning on this generation. If you are planning to interconnect, it is essential that you go through this process.
How does the process work?
It is the customer's responsibility to start the interconnection review process by submitting an application to the local utility serving the planned generation site. The particular application form will depend on the size and type of project and its location. Once you send in a complete application and the specified fee, the utility will begin its review. The utility may contact you at different points throughout the process for additional information or to notify you that the project has passed or failed one of the review steps.
A project will follow one of three review paths (simplified, expedited, or standard) based on its generation type and size, customer load, and the characteristics of the grid where the generator is to be located. Each track has specific review time frames and fees, with shorter time frames and lower fees for small and simple systems and longer time frames and higher fees for larger and more complex systems.
It is essential to submit all application materials, additional information, and fees in a timely manner as the review time frame does not include periods where the utility is waiting for additional information from the applicant.
At any point in this process, the customer may elect to withdraw from the review and not pursue the installation.
If the project fails all possible review avenues or if the customer is unwilling to make required modifications, the utility may deny approval to interconnect.
Who is involved?
You, your local utility, town and local inspectors, and often the contractor installing your system all play a role in the interconnection process. Your local utility is the distribution company that serves the site where you are installing a distributed generation facility. The contractor may be needed, even for small systems, to provide technical information on your system required by the utility. The time frame for each step of the review pauses whenever the utility requests additional information on the project, so it is essential to respond to these requests as quickly as possible.
When do I need to start the process?
It is ideal to begin the application process as soon as possible after you have all the information required for the application. Because the application form requires a certain level of technical detail, this will typically occur at the end of the project's design phase.
Although applying for interconnection could be deferred until, for example, the end of the design phase, you may wish to contact your utility much earlier in the process in order to a) identify any unique circumstances that would affect interconnection feasibility and cost and b) obtain approval for interconnection as soon as possible.
What is net metering?
Net metering allows customers with distributed generation systems, typically wind or solar, to be compensated when their systems generate more electricity than the customer is using onsite. Effectively, the meter "runs backward" whenever a customer's distributed generation system is producing more power than is being consumed onsite.
At the end of each month, on-site generation is credited against any electricity that the customer consumed from the grid. If the customer has net excess generation at the end of the month, the customer receives a credit on his or her utility bill.
What types of generating facilities are eligible for net metering?
Onsite generating facilities of any type are eligible for net metering if they are 60 kW or smaller in size. Facilities of up to 2 MW are eligible if they are powered by wind or solar or are on a farm and powered by any renewable energy source.
What are net metering credits?
Net metering credits are the credits that customers receive on their utility bills for net excess generation (generation over and above the kilowatt-hours that the customer draws from the utility grid over the course of the month).
Can net metering credits be allocated to other customers?
Yes, net metering credits can be allocated to other customers that are in the same utility service territory and ISO-NE load zone. The net metering customer designates which customers should receive the credits by completing Schedule Z to the utility interconnection tariff.
What is neighborhood net metering?
"Neighborhood net metering" is available for neighborhood-based facilities that are owned by (or serve the energy needs of) a group of 10 or more residential customers in a single neighborhood and served by a single utility. The neighborhood facility may also serve additional customers (including commercial). The net metering credits from a neighborhood net metering facility can be allocated to the customers in the neighborhood that own, or are served by, the facility.
How do I apply for net metering?
A customer applies for net metering by completing Schedule Z in the utility interconnection tariff. Public entities are also required to apply for classification as a public entity. The form is available here.
What are net metering caps?
Massachusetts law limits net metering capacity to 6% of each utility's historical system peak load. Half of that capacity (3% of the total) is available for public facilities and half for private.
How do I know if my project will qualify as a public facility?
The Massachusetts Department of Public Utilities requires all public entities to apply for classification as a public entity. The form is available here.
What is the System of Assurance of Net Metering Eligibility?
Massachusetts System of Assurance of Net Metering Eligibility enables customers that are developing net metering systems to reserve space under the net metering cap.
Do all utilities allow customers to net meter?
Net metering is allowed by all of the investor-owned utilities in Massachusetts: National Grid, NSTAR, Western Massachusetts Electric, and Unitil. Municipal utilities may also offer net metering, although the rules may be different. Customers of municipal utilities should check with their utility.