Net Metering Guide

Overview

If you are a customer of a regulated electric company (Eversource, National Grid, or Unitil), you may net meter.  Net metering allows you to generate your own electricity to offset your electricity usage.  Common examples of net metering facilities include solar panels on a home or a wind turbine at a school.  These facilities are connected to a meter, which measure the net quantity of electricity that you use.  When you use electricity from the electric company, your meter spins forward.  When you generate excess electricity and “export” electricity to the electric grid, your meter spins backward. 

Massachusetts does not differentiate between behind-the-meter net metering (electricity generation consumed on the same site it is generated) versus virtual net metering (electricity generation consumed at a site other than where the electricity is generated). For most purposes, including credit calculation, there is no difference between net metering and virtual net metering. 

Net metering facilities

Your net metering facility may use any type of generating technology, regardless of whether it is a renewable technology, if it is smaller than or equal to 60 kilowatts (kW). G.L. c. 164, § 138; 220 CMR 18.00.  If your net metering facility uses wind, solar, or anaerobic digestion technology, then it must be:

• 2 megawatts (MW) or less for a private facility
• 10 MW or less for a public facility. G.L. c. 164, § 138.

General program net metering caps

State law requires that the electric companies must have separate net metering caps for public and private net metering facilities in the general net metering program (GP).  St. 2010, c. 359, s. 29.00.  Each GP cap is equal to a percentage of each electric company’s highest historical peak load, which is the most electricity consumed by the electric company’s customers at any one time.

As of April 11, 2016, the caps are:

Under the GP, once an electric company fills its net metering cap, new customers that require space under that cap cannot participate in net metering.  Note that cap exempt facilities (cap exempt facilities are those with a nameplate rating less than ten kilowatts on a single-phase circuit or 25 kilowatts on a three-phase circuit) will be able to net meter even if the relevant cap is full. 220 CMR 18.02, 18.07(5).

Public and private net metering facilities have different size limits and may generate different credit values.  For more information on public facilities, please see Designing Net Metering Facilities.

Small hydroelectric net metering caps

State law also requires that the electric companies have a separate cap for facilities participating in the small hydroelectric power net metering program (SHP) that has a combined capacity of 60 MW.  St. 2016, c. 188, s. 10. Each SHP cap share is equal to an electric company’s load measured in megawatt-hours in calendar year 2016.  D.P.U. 17-10-A.  The SHP cap shares will be determined in the D.P.U. 18-04 compliance filings.

Under the SHP, new customers must obtain a cap allocation to participate even if they are less than ten kilowatts on a single-phase circuit or 25 kilowatts on a three-phase circuit.  Under the SHP, once an electric company fills its net metering cap, new customers that seek to participate in net metering must apply for a cap allocation from the relevant GP cap unless they are a cap exempt facility.

Overview

Net metering credits can offset the delivery and supply portions of your electric bill, as well as customer charges.  You may use net metering credits to decrease your electricity bill to zero dollars and zero kilowatt hour (kWh) usage.  G.L. c. 164, §§ 138, 139.  220 CMR 18.04.

Customers who net meter are billed for their net consumption of electricity.

Net monthly consumption = (total electricity consumed in a month) - (total electricity generated in a month).

• If your net consumption is positive, you must pay an electricity bill to your electric company for the excess consumption at the end of the billing period. 220 CMR 18.03(4).
• If your net consumption is negative, you will receive a net metering credit on your electricity bill.  Therefore, you will not owe the electric company money during that billing period.  220 CMR 18.03(3).  The net metering credits appear as a dollar amount (not as kilowatt hours) on your bill.  The credits never expire and will rollover to the next billing period.

Credit calculation

To determine your credit value:

1. View the mathematical formula in 220 CMR 18.04 to determine which inputs you should include in the net metering credit calculation.  Appendix A of your electric company’s net metering tariff provides the information in a visual format.  Some formula inputs vary between the electric companies and the type of customers. 
2. Consult your electric company’s current schedule of rates.  Your rate schedule will be determined by the host customer’s rate class (e.g., residential, commercial, etc.).
3. Plug the values into the credit formula and determine the value of a credit for each unit of excess electricity (in kilowatt hours) produced by your net metering facility.  Be aware, that the electric companies’ schedule of rates changes often.  For example, basic service rates for residential customers change every six months.  Also, each electric company’s schedule of rates is different. 

Helpful information to keep in mind when calculating net metering credits 

• The type and capacity of the facility determine your net metering class. To determine the capacity of a solar net metering facility, use 80% of the facility’s kW DC capacity.  If the solar net metering facility is cap exempt, use the nameplate rating (kW AC).  To determine the capacity of a wind net metering facility, anaerobic digestion net metering facility, or small hydroelectric net metering facility, use the nameplate rating. G.L. c. 164 §§ 139(f) and 139A(a); 220 CMR 18.07(4).

  General Program

Class Number	Size of Private Facility	Size of Public Facility
Class I net metering facility	60 kW or less	60kW or less
Class II net metering facility	more than 60 kW but less than or equal to 1 MW	more than 60 kW but less than or equal to 1 MW
Class III net metering facility	more than 1 MW but less than or equal to 2 MW	more than 1 MW but less than or equal to 10 MW

Small Hydroelectric Program

Type	Size of Facility
Small hydroelectric net metering facility	2 MW or less

• The following rates are never included in the calculation of net metering credits: 
  1. Fixed customer charges
  2. System benefit charges, including both the energy efficiency (also known as demand side management charges) and renewable energy charges
  3. Demand charges (e.g., $/kW or $/kVa charges)
  4. The energy efficiency reconciliation factor (EERF) G.L. c. 164, § 138.
• If your net metering facility is a Class III net metering facility (has a capacity of more than 1 MW) or is in the SHP, your electric company may pay the host customer for the value of some or all of its net metering credits from excess generation, instead of applying the credits to the electric account(s).  This decision is left entirely to the electric company.  The electric company must notify the host customer whether it will purchase the value of the credits (cash out) or allocate net metering credits to future bills before the facility is operational. G.L. c. 164, § 139(b)(1); G.L. c. 164, § 139A(b), 220 CMR 18.05(4).

Solar net metering credits

In April 2016, the Solar Energy Act created different net metering credits values for solar net metering facilities.  Before the Solar Energy Act, solar net metering facilities generated standard net metering credits under the old regime.  After the Solar Energy Act, certain solar net metering facilities generate market net metering credits under the new regime.

220 CMR 18.04 and Appendix A of your electric company’s net metering tariff will tell you whether your facility will generate standard net metering credits or market net metering credits.

In general:

• Solar net metering facilities that are not cap exempt and that submitted a complete application for a cap allocation by September 26, 2016, and obtained a cap allocation by January 8, 2017, generate standard net metering credits for 25 years from the date on which they were first authorized to interconnect to the electric grid, if the facility obtained a cap allocation by January 8, 2017.  D.P.U. 16-64-H at 5.
• Solar net metering facilities that are not cap exempt and that submitted a complete application for a cap allocation after September 26, 2016, or that submitted a complete application for a cap allocation by September 26, 2016 but did not obtain a cap allocation by January 8, 2017, will receive market net metering credits equal to 60% of the net excess kilowatt hours if they receive a cap allocation after January 8, 2017.  220 CMR 18.02, 18.04(3), (4), and (6).

All solar net metering facilities that are not cap exempt will generate market net metering credits for 25 years from the date of authorization to interconnect to the electric grid.  220 CMR 18.04.

The following solar net metering facilities generate market net metering credits equal to 100% of the net excess kilowatt hours:

• New Solar Class I net metering facilities in the private cap of which a municipality or other governmental entity is the host customer and only allocates net metering credits to the accounts of other customers that could qualify as a municipality or other governmental entity. 220 CMR 18.04(4).
• New Solar Class II and Class III net metering facilities in the public cap.  220 CMR 18.04(4).
• Cap exempt facilities that are solar net metering facilities that were interconnected in the old regime and that later (i.e., after September 26, 2016, at 2:00 p.m.) expand and remain a Class I net metering facility will generate 100% net metering credits for 25 years from the date upon which the facility was first authorized to interconnect to the electric distribution system. 16-64-H at 4.
• Grandfathered facilities that are solar net metering facilities that were interconnected in the old regime and that later (i.e., after September 26, 2016, at 2:00 p.m.) expand, and remain a Class I net metering facility will generate 100% net metering credits for 25 years from the date upon which the facility was first authorized to interconnect to the electric distribution system. 16-64-H at 5.
• New solar net metering facilities that are designated as agricultural net metering facilities and retain this designation will generate 100% net metering credits for 25 years from the date upon which the facility was first authorized to interconnect to the electric distribution system.  After 25 years, the new solar net metering facility that is an agricultural net metering facility will transition to 60% market net metering credits.  G.L. c. 164, §§ 138, 139; D.P.U. 17-10-A at 29.  To apply for the agricultural net metering facility status, submit an application to the Massachusetts Department of Agricultural Resources.

For specific information about net metering credits for your net metering facility, contact your electric company.

Credit allocation

The host customer of a net metering facility determines what happens to the net metering credits a facility generates by submitting a form called Schedule Z to the electric company.  A host customer may change Schedule Z no more than twice in one calendar year, unless there is mutual agreement to change it more often.  Contact your electric company for more information about Schedule Z. G.L. c. 164, § 139(b)(1).

As a host customer, you may use net metering credits to offset your bill from your electric company.  You may also assign net metering credits to other accounts (even if they are not your accounts) as long as all the accounts are:

1. with the same electric company; and
2. located within the same ISO-NE load zone.

If you allocate net metering credits to a public entity, there is no effect on the public entity’s 10 MW limit.  A public entity may receive an unlimited amount of net metering credits with no effect on its 10 MW limit.  The capacity of a net metering facility within the public cap only affects the host customer’s 10 MW limit.

Time of use rates

Time of use (TOU) rates are rate designs with a peak and off peak rate.  Commercial and industrial electric customers may be on a TOU rate, provided that the customer meets the requirements to be on the TOU rate.  For more information on the TOU rate, consult the electric company’s TOU tariff.  Only NSTAR Electric (Eversource Energy) and National Grid offer a TOU rate for residential customers.  If you are on a TOU rate, you will generate net metering credits based on the TOU rate.

Overview

The design, installation, and interconnection of a net metering facility can be complex.  We recommend that you consult a professional.  We do not regulate installers and developers and cannot endorse any companies.

It is your responsibility to make sure that your net metering facility complies with the net metering rules and regulations.  We highlight some of the important rules below.  However, you should read the Important Resources provided below to make sure you understand all of the rules and regulations associated with net metering. 

Designing a net metering facility to comply with DPU rules

The Single Parcel Rule defines a net metering facility as “the energy generating equipment associated with a single parcel of land, interconnected with the electric distribution system at a single point, behind a single meter.”  

According to the Subdivision Rule if you want to install a net metering facility on a parcel of land that was the result of a subdivision occurring after January 1, 2010, you must petition the DPU.

To design a net metering facility participating in the GP that complies with the DPU’s rules and regulations, please keep the following information in mind:

1. Check if the parcel boundaries have changed since January 1, 2010 with the relevant registry of deeds.  D.P.U. 11-11–C  at 21-22.
2. You may have a qualifying facility (QF) and a net metering facility on the same parcel of land but they must be wholly separate from each other. The QF and the net metering facility cannot share an interconnection point or a meter. D.P.U. 11-11 E at 19 20, n. 15.
3. The net metering facility capacity is calculated in alternating current (“AC”).  220 CMR 18.09(6).
4. For cap allocations, AC capacity is calculated as 80 percent of the facility’s direct current (DC) rating at standard test conditions. D.P.U. 17-34 at 1.
5. You may expand an existing net metering facility or develop your net metering facility in phases. D.P.U. 11-11-E  at 19.  However, if you seek to expand your net metering facility the value of your net metering credits may change.  D.P.U. 16-64-C at 25-29.  The Department provides clarification on the value of credits for net metering facilities that seek to expand in D.P.U. 16-64-H.
6. You may not build two net metering facilities on a single parcel of land unless you receive an exception from the DPU.
7. You may not net meter a portion of a generating facility. D.P.U. 11-11-E at 19.

If you cannot design a net metering facility that complies with the DPU’s net metering rules and regulations, you may be granted an exception.

The electric companies may grant exceptions to the Single Parcel Rule on the basis of optimal interconnection.  The exceptions may include multiple interconnection points and multiple meters for a single facility.  D.P.U. 11-11-E.  For more information on submitting a petition to the DPU, visit Petitioning the DPU.

Note that small hydroelectric net metering facilities participating in the SHP are not subject to the Single Parcel or Subdivision Rules.

Important resources

Before designing your net metering facility, you will want to read the following resources at a minimum:

• Massachusetts general laws governing net metering.  G.L. c.164, §139(f); 
• The DPU’s net metering regulations. 220 CMR 18.00; 
• the DPU’s Net Metering Guide; 
• the Massachusetts System of Assurance of Net Metering Eligibility webpage if applying for a cap allocation with MassACA;
• Important net metering dockets:
  • DPU 11-11, which establishes important definitions and rules for net metering, such as the Single Parcel and Subdivision Rules.
  • DPU 16-64; which establishes the rules for market net metering credits.  This proceeding also discusses the minimum monthly reliability contribution.
  • DPU 17-22; which discusses possible blanket exceptions to the Single Parcel Rule and Subdivision Rule.

To access these resources, go to the Net Metering Filings webpage.

Public facilities in the GP

To be in the public cap under the GP, your facility must be a Class II or III:

1. that is owned or operated by a municipality or other governmental entity; or
2. of which is the municipality or other governmental entity:
   • is assigned 100 percent of the output;
   • is the host customer; and
   • if allocating net metering credits, allocates only to municipalities and other governmental entities. D.P.U. 11-11-D Appendix A at 3.

If your facility cannot meet the criteria listed above, your facility belongs in the private net metering cap under the GP.  A facility cannot be in both caps at the same time.

Public net metering facilities may be up to 10 MW.  However, each unit must be at least 60 kW and cannot exceed 2 MW.  G.L. c. 164, §§ 138, 139(f); 11-11-C at 15.

Only the DPU can classify participants as “municipalities” or “other governmental entities,” that is to say, as public entities. There is no self-designation.  To receive this classification (also called a public ID number), a participant must file an Application for Municipality or Other Governmental Entity with the DPU electronically.

There are two different situations where a public entity (either municipality or other governmental entity) would need to obtain a classification number:

• A public entity that wants to start net metering in the public cap.  A public entity will not be able to create an account with MassACA if it does not have a public ID number issued by the DPU;
• A public entity that is going to receive net metering credits from a separate public entity (through Schedule Z).

Calculating the capacity of a solar net metering facility with MassACA

When applying for a cap allocation with MassACA, the AC capacity of a solar net metering facility is 80% of the facility’s DC rating at standard test conditions.  This means that the AC capacity that is used to determine your net metering cap allocation may be different than the “as-built” AC capacity.

Qualifying as a public facility

Both the host customer and all offtakers must be public entities with a public ID number provided by the DPU.

Parcel boundaries

The DPU relies on the registry of deeds to determine parcel boundaries.  The DPU does not rely on GIS documentation to determine parcel boundaries.  If you have questions about whether and how your parcel boundary changes affect your net metering facility, contact your electric company first before contacting DPU staff.

Application of the 60 percent market net metering credit

If you are receiving market net metering credits, the 60 percent only applies to excess kilowatt hours generated.

Net metering credits and alternative on-bill credits (AOBCs)

Your solar facility cannot generate AOBCs through the Department of Energy Resources’ solar Massachusetts renewable target (SMART) program, at the same time it is generating net metering credits under the net metering program.  Your solar facility may generate AOBCs through the SMART program while you are on the waitlist for a cap allocation to participate in the net metering program.  See definition of alternative on-bill credit generation unit under 225 CMR 20.02.

A MMRC is a monthly fee that may appear on an electric customer’s utility bill.  The purpose of a MMRC is for all electric company customers to contribute to the fixed costs of ensuring reliability, proper maintenance, and safety of the electric distribution system. St. 2016, c. 75, § 9.  In 2016, the Legislature passed "An Act Relative To Solar Energy" which allows electric companies to petition the DPU for permission to implement a MMRC.  St. 2016, c. 75, § 9.  In 2018, the Legislature changed the statutory requirements for a MMRC.  St. 2018, c. 227, § 15-27, 24. 

The DPU approved Eversource Energy's request for a modified MMRC for net metering host customers in D.P.U. 17-05-B at 100-156.  On August 29, 2018 the DPU informed Eversource Energy that it would need to file a petition and proposed tariffs in D.P.U. 18‑72 to comply with the order and amended statute.  D.P.U. 17-05, Hearing Officer Memorandum.  Eversource Energy has not refiled a MMRC to date. 

National Grid requested an MMRC in D.P.U. 18‑150 at 519‑542.  The DPU declined to approve National Grid’s MMRC.  D.P.U. 18‑150 at 541.  The DPU also stated that we encourage National Grid, Eversource Energy, and Unitil to file a joint proposal that (1) is uniform across the electric companies and (2) consistent with the DPU’s long-standing rate structure goals.  D.P.U. 18‑150 at 541-542. 

This net metering guide was created to provide an overview of net metering.  For more information on net metering visit the net metering homepage.  You may also find the following resources helpful:

• Net metering eligibility
• Net metering glossary
• Net metering laws and regulations
• Apply for a cap allocation with MassACA
• Apply for a public ID number
• Approved public entities
• View net metering filings
• File a petition for a net metering exception

MassACA (also known as the System of Assurance of Net Metering Eligibility) was created by the DPU to:

1. track the aggregate capacity of all net metering facilities; and 
2. provide host customers and other stakeholders with an assurance, before beginning construction, that a facility will be eligible to net meter once it is able to generate electricity.

MassACA started accepted applications for a cap allocation (ACA) on January 24, 2013.  For more information about MassACA or to review the aggregate capacity of net metering facilities in Massachusetts visit the MassACA website.  For tips on applying for a cap allocation, visit our "how to" page.