Net metering

For small renewable generators that operate on the premises of a power consumer, power companies allow the customer to "run their meter backwards," crediting the customer for the full retail cost of the electricity they generate on premises. While this may appear to be simple and fair compensation to the customer/owners of the generator, the (hidden) subsidy for net metering comes from other power users who compensate the power utility for lost profits from the sale of electricity to those self-generating customers. Another limitation of net metering is the loss of revenue for over-sizing the on-site generator and overproducing clean electricity above and beyond usage on-site.

I thought running the meter backwards is when the on-site renewable generator is running a surplus and the utility buys that electricity (crediting the customer vs. his elctricity bill), as they are required by law to do here in NJ and in some other states.

I hadn't heard before of the green tags. That sounds like carbon offsets - can be moderately beneficial if done right, but isn't going to be a major part of the solution, and can easily be abused.

Michael has it pretty much correct. What Russ and Duggles are missing is the differences between wholesale and retail electricity and the intrinsic value of dispatchable power. The electric "rate" is generally over twice the actual value of the power generated. The difference is the cost of the transmission and distribution systems and the administrative costs of the system. If you self generate power and have net metered excess, you are providing none of that infrastructure and yet you are getting paid for it. In the case where you generate enough power to completely offset what you use from the grid, you will pay nothing. However, the utility still has the investment and cost of supplying power to you, metering the usage, etc. Even worse, the utility has to take the excess power you generate, even though it is likely supplied at a low demand period when they really don't need and it and potentially have to operate their units uneconomically.

Net metering is a real cute selling point when only 0.5% of the users are generators. The system will fall apart if self generation becomes significant.

As a frequent anonymous poster, here, biodiversivist, I'm surprised you don't know about feed in tariffs or Renewable Energy Payments.  They stimulate PV deployment without net metering and are much more effective as a standalone incentive policy.  You will learn more in the next installment.  It is true that rooftop PV is still relatively expensive compared to other Renewable Energy Payments but if we want to prioritize and stimulate the building of small distributed generation it does cost more money.

Net metering is only tenable as a niche policy and a supplement to other stimulative policies at the moment for PV.  

Well, cough there are always a lot of fans of tariffs, until someone suggests naming the tariff after you. lol

Anway, if solar isn't viable because we can't slap a meter on it and charge you by the kwh, then how about we flat fee it and everybody pays a flat $2000 a month and they get free solar?  

I could sell this in Chicago.
We have a machine.

Actually, the way the local gas & electric does it where I live, you only get credited for the generation portion of your bill, and the credits reset to zero every 12 months.  You still have to pay for the service and transmission costs of the power provided to you, and you must size your system to not exceed your needs.

Additionally, you have to pay all costs relating to the installation of new meters, and the utility owns and maintains them.  Assumedly, this is to prevent unscrupulous customer-generators from tampering with the meters.

I think it's also possible to do it in such a way that prevents any excess energy from flowing back into the grid.

Personally, it all seems pretty useless for a typical homeowner.  If I ever install PV solar, I'm not even going to bother with an inverter, let alone grid tie-in.

What Duggles describes isn't net metering exactly. It's more like being a qualified wholesaler. I think this supports the overall conclusion that when self generated power is valued at it's true value to the customer (in this case the utility) it's hardly worth the effort for a home generator.

Thank you, KenG.  I guess it's sort of like, "not all that glitters is gold", but in this case it's "not all that's called net metering is net metering".