The analysis of your business’ electric utility bills is fundamental to assessing the potential value of a solar photovoltaic system. By understanding your company’s energy demand and consumption as measured by your electricity meter, you can determine the optimal solar system size for the maximum ROI. Read on to learn more about the importance of utility bill analysis when considering solar.
Every utility customer has an electricity meter at their facility for utilities to collect customer energy usage data to inform their electricity transmission and distribution grid. Many states have deployed solar incentives, which credit solar customers based on the amount of clean energy sent to the grid, as measured by the electricity meter.
Electric Meter Types
Solar customers can utilize three unique kinds of electricity meters, depending on the grid interconnection strategy and solar revenue streams: single-directional, bi-directional and dual meters.
A single-directional meter measures energy in one direction, either as an input or output relative to the facility and the grid. Using a single-directional meter, solar projects may be tied to the grid in a “front-of-meter” application, where the system feeds all production directly to the utility. In New York, solar production exports are credited at the determined Value of Distributed Energy Resources (VDER), which drives project revenues based on when and where the system feeds energy into the grid.
Conversely, many commercial and industrial (C&I) solar projects are connected “behind-the-meter,” with solar production offsetting the on-site load. Clients may realize significant project value with this interconnection strategy if their utility territory charges high electricity rates.
Bi-directional meters are capable of displaying energy flow to and from the grid. A bi-directional meter is important for a solar project using a net-metering policy because it will simply display net energy flows. Net metering policy often drives lucrative project economics, as the project owner receives monetary credits for excess solar production exported to the grid. A customer’s meter “runs backwards” if the solar energy export exceeds on-site grid demand. Similarly in New York, a “remote” net-metering policy allows C&I customers to allocate net metering credits generated from an offsite solar project to another meter at a property owned or leased by the customer, as long as both meters are located within the same utility territory and NYISO load zone.
Dual-metering refers to a two-meter system in which the meters are independent; that is, they do not communicate with each other. In this case, one meter displays energy demanded from the grid and the other meter reads kWh solar exports to the grid. Dual-metering is important to feed-in-tariff (FIT) markets, where the utility contracts solar exports at a fixed rate, e.g. Rhode Island’s Renewable Energy Growth (REG) Program.
The various state solar incentives require different types of meters, which ensure that the system owner or offtaker receives the appropriate compensation for the clean energy they generate. Electricity meters are therefore crucial components of a solar system that inform the ongoing project returns.
With over a decade of national experience, EnterSolar has become the preferred solar developer for C&I clients seeking superior project execution and optimal financing solutions. EnterSolar continues to leverage metering policy across states to develop turnkey projects for clients that strive to be industry leaders in sustainability. To understand how your local metering policy may help to deliver highly lucrative project economics, please don’t hesitate to contact us!