November 7, 2018
“What happens when my solar system overproduces?” This is a common question we receive from New York solar customers, and we understand why it is important. After all, you don’t want to overproduce power and not receive credit for it!
Many states address this concern with a policy called “net metering.”
Net metering means if you overproduce (probably in the summer), the utility will credit your account for that overproduction. Then when your system is under-producing (probably in the winter), the utility will use this credit to offset your current electric bill.
Each state, however, has different legislation in place with net metering.
New York State made an especially big overhaul of its net metering policies in 2017 when it introduced the Value of Distributed Energy Resources (VDER) and the Value Stack.
So if you live in New York, how does the VDER policy change net metering? Let’s take a look at how it affects residential, commercial, and remote net metering customers.
Residential customers in NY saw very little change with the new VDER policy. Any system receiving utility approval before January 1, 2020, will be under standard net metering rules.
Like we mentioned before, you can think of net metering like a utility savings bank.
During months when your solar overproduces, the utility takes this monthly overproduction and “deposits it” into your “utility savings bank.”
When you reach a month when the solar did not overproduce and you owe the utility some money, they will pull out of your “utility savings bank” first before they charge your account.
The VDER policy does not allow utilities to write you a check for any extra net metering credits that you might accumulate. However, they can carry over from year-to-year for 20 years.
So if you are a residential customer in NY, as long as you have net metering credits built up in your account, you will not receive an electric bill besides the standard customer connection charge.
Commercial customers are the ones who saw the biggest change with NY’s VDER policy.
Instead of standard net metering, commercial customers have two major changes:
The Value Stack is based on environmental value, demand reduction on the grid, and the wholesale price of electricity. It is monitored by the Public Service Commission. This prevents utility companies from tweaking the value stack for their own benefit.
For example, let’s say my commercial solar system overproduced a total of 750 kWh at the end of the month. Instead of putting this into my “utility savings bank” like a residential customer, the utility will give me a dollar credit that’s based on the Value Stack rate.
If the Value Stack is 8.5 cents per kWh, then I will receive a $63.75 credit on my bill (750*$0.085). This dollar credit can help pay any customer charge, demand charges, and any other charges that appear on my bill.
|Overproduction Amount||Value Stack Price||Credit Received|
|750 kWh||8.5 cents||$63.75|
If the dollar credit covers your complete bill and some credit still remains, then this remaining credit will be applied to the next bill. This allows you to build up a credit for the winter months when solar production is not as good.
Remote net-metering (also known as Virtual Net Metering) is when you overproduce at the meter the solar system is connected to (called the host account), and you use that overproduction to offset other bills without solar (called the satellite accounts).
Remote net metering is allowed with the VDER change for both residential and commercial projects, and the overproduction that goes to the satellite accounts is based on the Value Stack.
If you have a large solar system on your host account, and you are using that system to offset two other satellite accounts, you will see a monthly dollar credit appear on the satellite accounts. If you have a remaining dollar credit after all the satellite accounts have been covered, this remaining credit will be applied to the next bill.
In summary, you will always be receiving credit when your solar system overproduces. If you are a residential customer, then you will receive the standard net metering credit. If you are a commercial customer or remote net metering customer, then you will receive the Value Stack dollar credit.
If you are wondering what your electric bill would look like with solar, contact us today! We will be glad to go over your electric bill with you and develop a custom proposal that best fits your needs.