The grid of today and tomorrow looks and operates much differently than the grid of yesterday. What used to be a one-way system in which the power plant supplied energy to end-users, is now an integrated network. Utility customers that used to simply consume, and pay their bill for what they used, now have greater control over what they use through smart, innovative technologies like smart meters, programmable thermostats, smart phone apps that can manage when certain things – like when the heat or A/C gets turned on – happen at homes or businesses.
Customers can be producers of electricity, too, if they choose to install an on-site generation system such as rooftop solar, a small wind project, a combined heat and power system, or a anaerobic digester that produces electricity from organic wastes.
This transformation has been called “disruptive” by the electric utility sector because it undoubtedly puts pressure on how they do business, and how they’ve traditionally earned dividends for their shareholders. But the consumer trends towards technologies and innovations that put more control into people’s hands are unstoppable, and play a large role in dramatically reducing carbon pollution because we will become less and less reliant on large, centralized power plants to supply customers’ energy needs.
The trends towards on-site generation are taking off globally, and here in Ohio, these systems can be “net metered” if the customer is within certain utility territories that enable this type of unique contracting and billing wit the customer.
Net metering refers to an electric meter located at a home or business that can track both the consumption (i.e., the electricity that flows into the building from the local grid), and the production (i.e., the electricity that flows out of an on-site power generation system). At the end of determined billing period, the “net usage” of a customer is determined by this meter.
In Ohio, the on-site power generation systems that can qualify for net metering include solar systems (rooftop or ground-mount), wind turbine(s), biomass (such as a methane biodigester), landfill gas, microturbines (a cogeneration technology that runs on natural gas) or a fuel-cell.
In any given month, if a net metering customer supplies more than what they use, they are credited by their utility for the excess power they’ve provided to the local grid. Likewise, if they use more than they produce, they must pay the utility for what they used. At the end of a specified period (typically after 12 months), net metering customers either pay the balance of what they owe for their net usage, or are paid by the utility for their net excess power that their system delivered to the grid. This “net metering credit” compensates the customer for what they fed onto the grid at times when they were using less than what their system was generating.
In the case of distributed solar systems, the scenario in which a system is producing more than what the net metered customer is consuming often happens during the times that the local grid needs it the most – on hot, sunny days when air conditioning units are cranked up.