energy Program

Shared Renewables: Expanding the Benefits of Net Metering

As interest in renewable energy continues to grow, states are seeking ways to make it easier for customers to invest in "greening" their energy supply. Shared renewables is an emerging vehicle by which renters, residents of multifamily properties and other customers that may not have an ideal location for their own renewable installation can invest in a shared system and reap the benefits of net metering.   In fact, a 2010 study by the National Renewable Energy Laboratory, the U.S. Department of Energy's primary national laboratory for renewable energy and energy efficiency research and development, found that only 22-27 percent of residential rooftops are a good fit for hosting an onsite solar energy system. With less than a third of the potential residential market able to install an onsite solar system, other options are going to be necessary for renewables to continue their breakneck pace of growth. As a matter of fairness, all ratepayers should be able to participate as we all contribute to the cost of programs that support renewable energy development.  Shared renewables programs address these issues by removing the requirement that a system be located on a customer's property in order for that customer to net meter. In this sense, shared renewables programs allow groups of customers to participate jointly in a single renewable energy system, such as a solar garden, and receive the benefits of their investment.

Moreover, shared renewables programs are often coupled with meter aggregation to allow customers with multiple meters (such as farmers or those in a multi-family home) to more cost-effectively invest in renewable energy. The combination of these two programs means that net metering is expanding from its traditional function as a mechanism to efficiently offset onsite customer load at a single facility into one that more fully enables all customers - and their varied situations - to participate in renewable energy programs to help their state reach its renewable energy goals. 

Shared renewable energy programs vary to suit their state's and/or municipality's specific goals. For example, several municipal utilities offer their customers a share in a single large solar facility along with the ability to gain net metering credits based on the size of the share and how much electricity the facility generates. The Sacramento Municipal Utility District's Solar Shares program offers customers access to a percentage of a centralized solar system for a fixed fee each month. Customers receive a net metering credit on their monthly bill based on the estimated amount of electricity that gets produced by their percentage of the system.  Florida Key Electric Coop (FKEC) offers a similar program called Simple Solar. However, under FKEC's program, customers lease solar panels and the customer's net metering credit is based on the actual production of the leased panels. One common feature between these two programs is that they use "virtual" net metering to distribute the benefits to participants.  Net metering under such programs is considered "virtual" because the renewable energy system is not directly connected to the participant's meter.  So instead of an actual meter spinning backwards when production exceeds consumption, credits are assigned to customer accounts to help lower their bill. 

Programs vary in ways that include: ownership of the shared renewables facility; the maximum system size that can be installed under the program; and the value given to the net metering credits produced by the system.  These issues need to be handled carefully to ensure a successful program.  There are a number of resources available for use in designing shared renewables programs.  One of the most comprehensive is "A Guide to shared Solar: Utility, Private, and Non-profit Project Development" published by the US Department of Energy. This guidebook contains a host of information on shared solar project models, state policies to support shared solar, tax and legal issues. The publication also includes model rules developed by the Interstate Renewable Energy Council, a leading clean energy non-profit. The resource is designed to help people develop shared solar programs that meet their shared's diverse needs.