Kaita Albanese, Student, Bard MBA in Sustainability

Imagine a blue-sky sunny day in July, and your rooftop solar PV system has just generated its record power. Even with your air-conditioning blasting, you are unlikely to use all of this power on a given day. Unless you have a means of storing it, whatever power you don’t use is sent back onto the grid. One way to “save” this power for another day is through net metering (NEM).

NEM, enacted in June 2011, allows eligible farm-based and non-residential customer-generators to engage in “remote” net metering of solar, wind, farm-based biogas systems and micro-hydroelectric facilities. NEM allows customers who generate some or all of their own electricity to use that electricity at any time, instead of when it is generated. The customer receives their electricity at another time in the form of kWh credits on their utility bill, not in the form of the actual renewable electricity the customer’s system once generated. This type of metering benefits your system financially, but it’s environmental value has been a matter of debate because the energy returned to the grid is measured as an offset for energy used from the grid.

Offsets would make do if New York State didn’t have a goal to meet: supply half of its electricity through renewable energy by 2030. Governor Cuomo’s Reforming the Energy Vision (REV) has recognized our State’s need to be better at valuing distributed energy resources. In March 2017, the Public Service Commission decided to move beyond net metering to an improved compensation program that realizes the full and accurate value of distributed energy resources (VDER). According to NYSERDA, VDER factors include the price of the energy, the avoided carbon emissions, the cost savings to customers and utilities, and other savings from avoiding expensive capital investments.

“Distributed resources offer tremendous value to the electric grid, but until now these values were not reflected in the energy prices paid to these resources,” said Commission Chair Audrey Zibelman. “Today’s order will finally give distributed energy resources their due, and all New Yorkers will have a more efficient, secure and responsive electric system as a result.” The order considers previously unquantified values including location and environmental benefits.

Large solar energy systems, known as Community Distributed Generation (CDG), are among several forms of distributed energy resources that are expected to benefit from this order.

What if I already have a system installed under NEM?

Existing residential and commercial distributed energy projects will continue to receive compensation under their NEM contracts and have the option to switch to the VDER tariff. Systems connected to the grid after the date of the Commission’s decision are eligible to receive NEM compensation for a period of 20 years, after which they will be eligible for the successive compensation system in effect at the time.

For more information on VDER, see NYSERDA’s website:


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