Feed-in Tariffs & Metering

The issue of tariffs is a distinct obstacle to DE growth although it is often confused with interconnection. More often than not the size of a DE generator is chosen in order to meet the anticipated needs for electricity and heat of the facility where the generator is sited. Nevertheless, because some DE technologies may generate electricity in times of low onsite demand, being allowed to feed power into the grid can be an appealing option for do-it-yourself generators.

It is of utmost importance for an investor in DE to be able to capture all the value that their project offers. Therefore, if a DE generator forsees feeding power into the grid they must maximize the value derived from that energy. A serious obstacle to DE investment in many jurisdictions is an unfair price paid to DE generators for any electricity fed into the grid. Indeed, in some jurisdictions DE installations are permitted to feed into the grid but the local utility offers zero compensation for any kilowatt-hours they receive. The utility derives all the value of the power fed onto its grid but the generator responsible for it receives no reward.

Various methods exisit to track net power fed into the grid and pay generators a fair price for thier electricity. The main obstacle to offering a tariff to onsite generators is not technical: net metering, net billing and feed-in tariffs for every kilowatt fed in are all opitions. The main factor which still prevents many DE installations from developing is lack of political will to tackle the problem.