Net Metering in Vermont

Net Metering

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Last Updated March 17, 2017

Program Overview

    • Implementing Sector:

      State

    • Category:

      Regulatory Policy

    • State:

      Vermont

    • Incentive Type:

      Net Metering

    • Eligible Renewable/Other Technologies:

      Solar Thermal Electric, Solar Photovoltaics, Wind (All), Biomass, Hydroelectric, Combined Heat & Power, Landfill Gas, Wind (Small), Hydroelectric (Small), Anaerobic Digestion, Fuel Cells using Renewable Fuels

    • Applicable Sectors:

      Commercial, Local Government, Nonprofit, Residential, Schools, State Government, Federal Government, Agricultural, Institutional

    • Applicable Utilities:

      All utilities

    • System Capacity Limit:

      2.2 MW for military systems; 20 kW for micro-CHP

    • Aggregate Capacity Limit:

      None

    • Net Excess Generation:

      Credited to customer’s next bill at the blended residential rate; excess credits not used within 12 months of generation granted to utility

    • Ownership of Renewable Energy Credits:

      Utility owns RECs unless the customer elects to retain ownership. Customers granting RECs to the utility receive a positive 3 cent/kWh credit adjustor applicable to all system production for 10 years. Customers electing to retain ownership of their RECs receive a negative 3 cent/kWh credit adjustor in perpetuity.

    • Meter Aggregation:

      Group net metering allowed

Summary

Note: Vermont has adopted new net metering rules, effective January 1, 2017. Net metering customers with a complete Certificate of Public Good filed prior to this date are grandfathered under Vermont’s former net metering rules for a period of 10 years from the date of commissioning.

Any electric customer in Vermont may net meter after obtaining a Certificate of Public Good from the Vermont Public Service Board (PSB). Solar net metered systems 15 kilowatts (kW) or less follow an expedited process for the Certificate of Public Good, if the customer successfully completes registration (that is, informing the PSB about the project) and complies with his/her electric utility interconnection requirements. In this case, ten days after receiving the certificate of compliance with the interconnection requirements, a Certificate of Public Good is automatically “deemed issued,” and the customer may proceed with installation. An application for a Certificate of Public Good for Interconnected Net Metered Power Systems for all other systems that are less than 150 kW is available on the program website listed above. Systems greater than or equal to 150 kW must make a filing for the Certificate of Public Good.

Eligible Technologies

“Renewable energy” is defined as “energy produced using a technology that relies on a resource that is being consumed at a harvest rate at or below its natural regeneration rate.” Biogas from sewage-treatment plants and landfills, and anaerobic digestion of agricultural products, byproducts and wastes are explicitly included. (The term “renewable energy” explicitly excludes solid waste that is not agricultural or silvicultural, as well as nuclear fuel, coal, oil, propane, and natural gas.)

System Capacity Limit

Net metering is generally available to systems up to 500 kW in capacity that generate electricity using eligible renewable energy resources, including combined heat and power (CHP) systems that use biomass. CHP systems that use a non-renewable fuel are limited to 20 kW and must meet an efficiency standard.

Aggregate Capacity Limit

As of January 1, 2017, Vermont no longer has an aggregate cap on net metering. Previously, the cumulative capacity of net-metered systems was limited to 15% of a utility’s peak demand during 1996 or the peak demand during the most recent full calendar year, whichever was greater.

Net Excess Generation

Any customer net excess generation (NEG) is credited at the blended residential rate and carried over to the customer’s next bill. The blended residential rate is the lowest of the following:

  • For electric companies whose general residential service tariff does not include inclining block rates, the per-kWh charge in the company’s general residential service tariff;
  • For electric companies whose general residential service tariff does include inclining block rates, a blend of those rates determined by adding together all of the revenues to the company during the most recent calendar year from kWh sold under those block rates and dividing the sum by the total kWh sold by the company at those rates during the same year; or
  • The weighted average of the blended residential rates for all Vermont electric companies (weighted by the annual retail sales of the electric companies.)

Any NEG shall be used within twelve months of the month earned; if not, it is granted to the utility with no compensation for the customer. Beginning January 1, 2017, credits may no longer be applied to non-bypassable charges.

System Size and Siting Credit Adjustors

Effective for customers filing a Certificate of Public Good January 1, 2017 and later, credit adjustors will be applied to customer bills based on system size and siting. Adjustors are applied to all production, as measured by a separate production meter. Positive adjustors are applied for 10 years, while negative adjustors are applied in perpetuity.

The credit adjustors are as follows:

  • Category I Systems (non-hydro facilities 15 kW or less) = 1 cent per kWh
  • Category II Systems (non-hydro facilities greater than 15 kW and less than or equal to 150 kW, sited on a “preferred site”) = 1 cent per kWh
  • Category III Systems (non-hydro facilities greater than 150 kW and less than or equal to 500 kW, sited on a “preferred site”)
  • Category IV Systems (non-hydro facilities greater than 15 kW and less than or equal to 500 kW, not located on a “preferred site”)
  • Hydroelectric Facilities = 0 cents per kWh

A “preferred site” means one of the following:

  • A new or existing structure whose primary use is not the generation of electricity
  • A parking lot canopy over a paved parking lot
  • A tract previously developed for a use other than siting a plant on which a structure or impervious surface was lawfully in existence prior to July 1 of the year preceding the year in which an application  for a Certificate of Public Good was filed
  • A brownfield
  • A sanitary landfill
  • The disturbed portion of a gravel pit, quarry, or simlar site for the extraction of a mineral resource
  • A specific location designated in a duly adopted municipal plan for the siting of a renewable energy plant
  • A site listed on the National Priorities List, provided development will not compromise or interfere with remedial action on the site and the site is suitable for development of the plant
  • The same parcel as, or directly adjacent to, a customer that has been allocated more than 50% of the net metering system’s electrical output.

Renewable Energy Credit Ownership & Credit Adjustors

Beginning January 1, 2017, the utility owns the renewable energy credits (RECs) generated by a customer’s net-metered system, unless the customer elects not to transfer ownership of these RECs at the time of application. Customers transferring RECs to the utility will receive an additional monthly bill credit for 10 years equal to $0.03/kWh multiplied by all kWh produced by the system during the billing period. Customers electing to retain REC ownership will be charged each month in perpetuity $0.03/kWh multiplied by all kWh produced during the billing period.

Prior to 2017, net-metered customers retained default ownership of RECs unless the customer elected to transfer ownership to the utility.

Interconnection

Utilities may require a customer to comply with generation interconnection, safety and reliability requirements, as determined by the PSB, and may charge reasonable fees for interconnection, establishment, special metering, meter reading, accounting, account correcting, and account maintenance of net-metered systems. (Interconnection requirements for systems 150 kW or less are accessible at the program website listed above. Interconnection requirements for systems greater than 150 kW must follow the interconnection procedures specified in PSB Rule 5.500).

Grandfathering

Net metering systems with a complete Certificate of Public Good application filed with the PSB prior to January 1, 2017 (as long as the application was filed at a time when the electric company was accepting net metering systems, based on the state’s former aggregate capacity limit) are grandfathered under the state’s former net metering rules for a period of 10 years from the date of the system’s commissioning. For this 10-year period, credits may be applied to all bill charges, including non-bypassable charges. Following this period, customers will be credited for NEG at the blended residential rate and may not apply credits to non-bypassable charges. Grandfathered systems are not subject to any REC or system size/siting credit adjustors.

Group Net Metering

Vermont allows “group net metering.” In order to set up such a net metering system, the group must file with the PSB and other relevant parties, the following information:

  • The customers and meters that are to be included as part of the group;
  • The method for adding/removing meters and information regarding credit allocation to each customer-meter;
  • The contact person responsible for communications, but not those related to billing, payment, or disconnect; and
  • A dispute resolution process.

The utility is required to bill all customers of the group individually. For group net metering systems placed behind-the-meter, electricity used on-site will be netted one-to-one against the host customer’s consumption. All NEG will be credited at the applicable blended residential rate and allocated to group members. For group net metering systems directly interconnected to the utility grid (in front of the meter), electricity produced is allocated to group members and monetized at the applicable blended residential rate. REC and system size/siting credit adjustors also apply to group net metering systems.

Biennial Update Proceeding

The PSB must conduct a biennial update in 2018 and every two years thereafter to update REC adjustors, system size/siting adjustors, the statewide blended residential rate, and criteria applicable to the different categories of net metering systems.

Other Provisions

Customers are responsible for the cost of installing a mandatory production meter. Electric companies may also require customers to install advanced metering infrastructure prior to serving the net metering customer.

Vermont’s net metering rules provide electric companies with the authority to require energy efficiency audits for customers seeking to install net metering systems if they are commercial or industrial customers, or residential customers with historic energy consumption of 750 kWh or more per month.

History

Vermont’s original net metering legislation was enacted in 1998, and the law has been expanded and modified several times, most recently by H.B. 702 of 2014. This legislation created a process to result in the establishment of a revised net metering program by January 1, 2017. Specifically, the legislation required the Department of Public Service to prepare a report by October 1, 2014, evaluating the current state of net metering in Vermont. This report is available here. The PSB followed up this report with workshops involving interested parties, and finally, a rulemaking process. More information is available here.

Authorities

    • Date Enacted:
      2013 (subsequently amended)

    • Effective Date:
      01/01/2017

    • Date Enacted:
      2001 (subsequently amended)

Contact

Memos

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    • 03/17/2017 by Autumn Proudlove

      Vermont’s new net metering rules became effective 1/1/2017. The new rules include several credit adjustors based on REC ownership, system size, and siting. Systems filing a complete CPG prior to 1/1/2017 are grandfathered for 10 years from the date of commissioning. The new rules no longer contain an aggregate cap on net metering in the state and will now credit net excess generation at the applicable blended residential rate. All website and authorities have been updated.

  • 08/04/2015 by Autumn Proudlove

    Annual review; updated REC ownership details, as per H.B. 40, enacted in June 2015. Added a link to the Department of Public Service’s 2014 net metering report.

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