U.S. Department of Energy Energy Efficiency and Renewable Energy

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September 04, 2012
Q.

Is there a federal law that requires utilities to buy back renewable electricity? Why do some electric coops in AL, TN refuse to buy it back and can they do that? Is there a minimum price per kwh they have to pay? I thought coops were supposed to help people. They aren't regulated by the PSC. Who regulates them? - Craig

A.

Thanks for contacting the SunShot Solar Outreach Partnership via the US Department of Energy's 'Ask an Expert' portal with your questions regarding utility procurement of energy derived from renewable sources.  There is currently no federal mandate that utilities buy back (or net meter) electricity produced from solar systems.  Any current net metering requirements are created in state-level policy.

The Database of State Incentives for Renewables and Efficiency (DSIRE) tracks these policies and posts them on useful maps at their website.  You can find a map of current net metering policies.

Individual states may require different pricing for net metered systems.  While some states require that utilities purchase the energy for full retail rates, others may only require that the utility purchase energy at the wholesale rate (which would be a lower price).  Freeing the Grid is another excellent source of information on this topic.  You can find an interactive map showing “grades” for each state’s solar policies with detailed information (if applicable) about the net metering and interconnection policies.  At this time, Tennessee and Alabama do not have state-wide net metering policies in place.

Finally, net metering policies (generally) apply only to utilities that are regulated at the state level.   Public power (or municipal) utilities and rural electric cooperatives on the other hand are regulated at the local level and by their members respectively.   Co-ops are often regulated by a Board of Directors, which are customers of the utility.  Customers of co-ops are considered members of the utility and typically have voting rights on orders of business. New Board members are often elected to the by a membership vote during an annual membership meeting.  Some co-ops elect to offer customer net-metering based on customer feedback/interests.  So, whether you’re a rate payer in the service territory of a municipal or rural electric cooperative,  you can always express your interests in the utility supporting renewable energy development through net metering. If that doesn’t work, find others in your utility service territory that are interested in net metering and work together!

If you’re interested in learning more about net-metering from the perspective of the co-op, you might find this issue paper from the National Rural Electric Cooperative Association useful.  

Thanks again for your question. We hope this helps!

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