Net metering in New Mexico is a set of state public policies that govern the relationship between solar customers (and customers with other types of renewable energy systems) and electric utility companies.
Background
Definition Net metering refers to the interconnection of a renewable energy system to the power grid. It allows consumers who have their own renewable generation power systems to connect to the power grid with an electric meter that spins both forwards and backwards, depending on whether the consumer is adding energy to the grid or using energy from the grid. At the end of the month, the customer's bill is based on the net amount of power that is drawn from the grid, minus the credits for excess power put into the grid. In New Mexico, customers who have systems that produce up to 80 MW of electricity are able to sign up for net metering. This is the highest power rating eligible for net metering in the United States. The three main utilities in New Mexico are PNM, Xcel Energy and El Paso Electric.
Benefits of net metering One benefit of net metering is that power is never wasted. When someone uses an isolated system that uses batteries that become fully charged while the system is still generating power, that excess power is wasted. Customer-generators, businesses and industrial operations can qualify for net metering. Customer-generators have the added benefit of selling renewable energy credits (REC) back to their utility. (A customer-generator is a small producer—that is not an electric utility—of electricity which is net metered and connected to the electric grid. An example would be a homeowner who puts solar panels on his rooftop.)
Utility-scale solar vs. residential solar A utility-scale solar facility is a large facility that generates solar power and moves that power into the electric grid. Almost every utility-scale solar facility has what is known as a power purchase agreement with the utility. The agreement guarantees a market for the utility-scale solar facility's energy for a fixed term of time. (Residential solar systems are not considered utility-scale). The size of a utility-scale facility can vary. For example, some utility-scale facilities provide only enough power for a few hundred average homes. Others offer a lot more energy. Factors that play into this are location, the type of technology used, and the availability of sunlight. For example, although not located in New Mexico, Recurrent Energies’ “Sunset Reservoir” project in San Francisco produces 5 megawatts of solar energy. It is built on top of enclosed reservoir in the middle of San Francisco. It is considered a utility-scale solar facility.
How it works
Net excess generation For customers with solar systems that can generate 10 kilowatts or less, the utility company has a choice in how they compensate that customer for net excess generation. The utility can give the customer a credit on their next bill equal to the utility's energy rate (the costs that the utility pays for its own electricity), or crediting the customer for the kilowatt hours of electricity that they have supplied back to utility through the grid.
Technical In New Mexico, a few technical requirements exist in order for a net metering system to be connected to the grid. First, the net metering system should have a visible means of disconnection allowing the utility to disconnect to system from the grid. Second, a net meter is required and should cost no more than $20. Third, there needs to be an inverter that disconnects when the grid goes down. The system capacity limit is 80 megawatts.
Eligibility In New Mexico the types of renewable technologies eligible for net metering are the following:
Combined Heat & Power Fuel cells using Non-Renewable Fuels Fuel cells using Renewable Fuels Geothermal Electric Hydroelectric Hydroelectric (Small) Landfill gas Microturbines Municipal solid waste Solar photovoltaics Solar thermal electric Wind (All), Biomass Wind (Small) Sectors that can use net metering include commercial, industrial, local government, nonprofits, residential homes, schools, state and federal government, agricultural, and institutional. The types of utilities that can participate in net metering are investor-owned utilities and electric cooperatives. Utilities that can participate are investor-owned utilities and electric cooperatives. When a customer leaves the utility, the utility must pay the customer for any unused credits.
Availability and jurisdiction According to DSIRE, “Net metering is available to all "qualifying facilities" (QFs), as defined by the federal Public Utility Regulatory Policies Act of 1978 (PURPA), which pertains to renewable energy systems and combined heat and power systems up to 80 megawatts (MW) in capacity. There is no statewide cap on the aggregate capacity of net-metered systems.” Additionally, all utilities that are subject regulation under the Public Regulation Commission’s (PRC) jurisdiction must offer net metering. Municipal utilities, which are not regulated by the PRC, are exempt.
Solar in New Mexico
Growth In New Mexico, the decrease in prices for solar systems is driving the market for it. Many homeowners and commercial companies are purchasing solar systems to help offset the increase in electric utility bills. More financing options are available today in New Mexico, more solar companies are competing, and this is leading to an increase in market penetration. The growth is predicted at 20% per year. As of early 2016, the market in the United States for solar systems had reached 1 million solar installations. This is equivalent to generating enough electricity to power 5.4 million homes, according to the national Solar Energy Industry Association. According to the Albuquerque Journal, “New Mexico ranks 8th in the nation today in terms of installed solar capacity per capita.” It is estimated that the solar market in New Mexico has only experienced approximately 10% of market penetration.
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