Utility Board President Explains New Jersey's Net Metering

August 03, 2005

In an online article published August 3, New Jersey Board of Public Utilities (BPU) President Jeanne Fox explains the central role that net metering policies play in promoting distributed generation of electricity in New Jersey. Net metering allows the connection of distributed generators through a single meter. Fox writes, "Net metering is an example of a simple regulatory change that can significantly enhance the economic incentives for using these new technologies." Read the article, which is titled "Net Metering in New Jersey," published by Energy Pulse.

Distributed power generators are located near customers and are smaller scale than central power plants. They get their name through connecting to the electricity grid at points (transformers) in the distribution network that operates at lower voltages than the transmission network where central power plants connect. Distributed generation can take advantage of local efficiencies, such as the heat that is normally cast off from combustion in power generation for some other purpose (combined heat and power). Many renewable generators, such as solar, for example, are small (in utility terms) and therefore fit into this category. DOE's Distributed Energy Resources program has a good online explanation of distributed technologies.

Net metering connects distributed generators to the grid through a single meter, which is simpler, less costly than installing another meter and administering a second bill. The utility's costs are minimal, Fox explains, usually comparable to having a customer install energy efficient equipment that reduces demand. And the utility benefits from increased system reliability and having customer-sited generation during peak periods.

New Jersey created three levels of safety requirements for interconnecting net-metered systems to the utility grid in New Jersey based on generating capacity:

  • Level 1 applies to inverter-based customer-generator facilities that have power ratings of up to 10 kilowatts (kW).
  • Level 2 applies to customer-generator facilities that have rated capacities up to 2,000 kW; these systems must IEEE-1547 and UL-1741 standards. standards for compliance for operation with an electric-distribution system.
  • Level 3 applies to customer-generator facilities with rated capacities up to 2,000 kW that do not qualify for either the Level 1 or Level 2 interconnections.

The Database of State Incentives for Renewable Energy lists New Jersey's interconnection rules in more detail under NJ net metering.