Massachusetts allows "neighborhood net metering" for neighborhood-based facilities that are owned by, or serve the energy needs of, a group of at least 10 residential customers in a neighborhood. The system must be behind one of the participant's meters, but only a minimal amount of load needs to be located on-site. A commercial customer may participate as long as it partners with at least 10 residential customers. The arrangement may require the utility to "wheel power," or move electricity across utility distribution lines, from the point of generation to the loads being served. To reimburse the utility for power wheeling among participants, utilities aren't required to issue the distribution component of neighborhood net-metering credits.
Interestingly in Massachusetts, the Green Communities Act makes net-metering credits transferrable. Though regulators and utilities are working out the rules for neighborhood net metering, the concept may be moot as customer generators figure out how to simply transfer their excess net-metering credits to non-generating customers.
Virtual Net Metering
Take the concept of community net metering, remove the geographical boundaries, and you get virtual net metering. This allows a renewable energy systems owner to offset electric accounts without any proximity requirement. It can be especially useful for municipalities who want to install a larger system to offset energy use at multiple buildings around town.
Rhode Island allows cities, towns, schools, farms, non-profit affordable housing and state agencies to participate. Customers can install a renewable energy system and receive a monthly check or apply excess credits to up to 10 other accounts they own. If a nonprofit affordable housing agency chooses compensation, it's obligated to use the money to benefit residents. California also requires investor-owned utilities to allow nonprofit affordable housing agencies to participate in virtual net metering.
Washington state is putting cash behind its efforts to encourage community solar. Under SB 6170, which went into effect last July, members of a community solar project qualify for Washington's production incentive for renewables. The base is 30 cents per kWh up to a cap of $5000 per year per participant. Actual production incentives may be as high as $1.08 per kWh when modules and/or inverters used in the community system are manufactured in Washington, a price that some consider overly inflated.
Shared Investment Strategies Emerge
Recognizing that few states require utilities to offer community net metering, some entrepreneurs have come up with creative alternatives that allow a group to invest in renewable energy despite the lack of such policies. A community solar investment can accommodate a range of system financing options, from direct ownership by individuals and groups to third-party financing through utilities or third-party developers.
The Mount Pleasant neighborhood in Washington DC, for example, recently began installing solar panels on 48 homes, the result of years of collective bargaining, research, lobbying and planning. Various investment strategies are under development, in part to accommodate for the differences in individual state laws that govern these arrangements.
