I’m working on the hook up of a solar energy system on a property in Connecticut and a wind power system in Alaska.   In Connecticut, the utility company by law has to purchase back any excess power a consumer creates with an alternative energy system.  The company GroSolar that is handling the installation, takes care of setting up the bi-directional metering as part of their installation.  It truly is simple and a turn key system.

In Alaska, they are a bit behind with complying with federal laws.   And it’s not nearly as simple (isn’t this why people choose to live in Alaska anyhow - because of the challenges of day to day life in the last frontier - I guess this includes bureaucratic challenges too).   With my local utility company in Southeast Alaska to purchase back power, I was told I would have to set up my own utility company.   The larger utility company in Alaska - Golden Valley Electric has an incentive program for renewable energy development.   But it really doesn’t look like something anyone would want to do - for as they say on their website - “The producers of renewable power do not keep any of the power they produce.”   Wow - where is the power to the people with that policy?

So just how does a utility company buy back power?  According to the Department of Energy’s Website - http://www.energysavers.gov/your_home/electricity/index.cfm/mytopic=10600?print - they can either set up two meters with one that measures the energy you consume and the other one that measures the energy you produce.  I think this is a very old post as most utility companies now use Bi-directional meters.  Additionally this article references a 1978 law - The Public Utility Regulatory Policy Act of 1978 (PURPA) requires power providers to purchase excess power from grid-connected small renewable energy systems at a rate equal to what it costs the power provider to produce the power itself.

There was further national legislation passed in 2005 with the Energy Policy Act of 2005 that Requires all public electric utilities to offer net metering on request to their customers.  According to this law, ‘‘(11) NET METERING.—Each electric utility shall make available upon request net metering service to any electric consumer that the electric utility serves. For purposes of this paragraph, the term ‘net metering service’ means service to an electric consumer under which electric energy generated by that electric consumer from an eligible on-site generating facility and delivered to the local distribution facilities may be used to offset electric energy provided by the electric utility to the electric consumer during the applicable billing period.

I guess there are all types of ways to enact this legislation that is very unfavorable to the renewable energy producer as demonstrated by the State of Alaska.  Furthermore, most of the net-metering laws are manipulated by the local utility companies to be in their favor ranging from the extreme policies of Golden Valley Electric where you cannot even use any of the power you create to the policy where the utility can company purchase the power from the renewable energy system at the lowest wholesale rate, but when you are using the power from their system, you are paying the prevailing retail rate all the way to Colorado’s policy that you get credited at the “avoided” cost rate - which is the prevailing retail rate for which you are avoiding.   What is interesting is how these utility companies attempt to manipulate the end user.  I was told by my local utility company at first that the reason that their utility could not do a bi-directional meter was because it would damage their grid.   Upon further inquires, I was told that yes it was possible, and they were in fact now doing it with other people - but that if I wanted to get a rebate, I’d have to set up my own utility company.

Here is a website that explains the net metering policy by state - http://apps3.eere.energy.gov/greenpower/markets/netmetering.shtml.   We summarized the policies in a previous post - http://www.cheetahpower.net/incentives/

Most states with more legislative power over the utility companies credit rates with renewable energy system at the retail rate or the “avoided cost” rate.  But they do not rebate the cost savings.  If at the end of the year, you have credits, the utility company absorbs those credits.   Colorado is the exception and the cost savings are rebated to the consumer for the “avoided” cost rate.  Kentucky does not have a end of the year credit grabbing policy like most other states.   In Connecticut, the rates are credited at the retail rates, but if you have a credit at the end of the year, that credit is absorbed by the utility company.

Rather amazing.

So the moral of the story here - make sure that you have strong consumer advocates at the legislative level who understand the nuances of electric metering.