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Status of Net Metering: 

Assessing the Potential to Reach Program Caps

Presenter Jenny Heeter 

Co Authors: Lori Bird and Rachel Gelman

October 22, 2014

Solar Power International

October 20 -23, 2014 • Las Vegas, Nevada

NREL/PO-6A20-62745 

ABSTRACT

Several states are currently addressing the issue of net 

metering program caps, which limit the total amount of net 

metered generating capacity that can be installed in a state 

or utility service territory. In this analysis, we examined net 

metering program caps to forecast how long net metering 

would be expected to be available in various jurisdictions 

under current policies. We also surveyed state practices 

and experience to understand important policy design 

considerations. 

STUDY METHODOLOGY

Using data available from utilities, PUCs, EIA, and other 

sources, we calculate: 

• Net metering cap/trigger (MW) 

• Current state of net metering (MW) 

• Percent of the cap that is met (%)

We examined states that have a net metering cap or trigger 

and that have a solar policy that is anticipated to drive 

future net metering installations. We focused on states that 

are likely to be closest to meeting or exceeding net 

metering caps over the next 5 years, based on projections.

Data sources and limitations include:

• Data on current net metering were obtained from EIA, 

PUC, and utility reports as well as from PUC staff. 

• Utilities in a given state may hit their caps at different 

times due to different net metering adoption rates in 

varying service territories.

• External estimates of future net metering penetration are 

largely unavailable.

• Forecasts of future residential and non-residential PV do 

not necessarily correlate with net metered capacity, and 

were adjusted where necessary.

• Estimates were made based on the fraction of future 

capacity that will be net metered; therefore, future 

market and policy changes may impact these results. 

CONCLUSIONS

• Currently, most states are substantially below their 

net metering caps or trigger levels, with the 

exception of New Jersey and Hawaii. Some utilities in 

Massachusetts and Vermont recently reached caps, 

prompting legislative action.

• Based on projections of near-term distributed PV 

capacity additions, a handful of states could reach 

current cap levels by 2018. 

• Considerations for setting and adjusting net 

metering cap levels may include interaction with 

other policies as well as potential rate and grid 

impacts. In setting cap levels, some policymakers have 

considered the interaction of net metering with state or 

local policy goals for distributed generation as well as 

federal policies. Another consideration is the potential 

financial impact on the utility and ratepayers.

• Communication about the status of net metering 

when installations are nearing the level of the cap is 

important for providing certainty to solar customers 

and project developers. Uncertainty about the 

availability of net metering can impede the PV market. 

• Clear definitions of caps and data sources are 

important for providing accurate information to the 

market about progress toward reaching a cap. 

Imprecise or ambiguous definitions in legislation have led to

challenges in a few commissions and delayed implementation

Download report: (Link forthcoming)

RESULTS

Just over half of states with net metering policies today 

include caps on net metered capacity; several states 

without caps have triggers that when reached enable net 

metering to be reviewed. Of the 44 jurisdictions with net 

metering;

• 25 (57%) have some type of restriction on total eligible 

capacity

• 16 (37%) have no restrictions

• 3 (7%) have notification or trigger policies. 

The level of net metering caps generally ranges from 0.2% 

to 9% of peak demand; two jurisdictions have substantially 

higher caps of 15% and 20%. 

Progress Toward Reaching Net Metering Program Cap 

or Trigger

State Net Metering Program Cap Policies

Based on projections of near-term distributed PV capacity, a handful of 

states could reach current cap levels by 2018.

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Range of Years When States Are Projected to Reach 

Net Metering Caps

DELAWARE MASSACHUSETTS NEW YORK

Despite reaching the 

program trigger, to date, 

the Board of Public 

Utilities has not 

authorized suppliers to 

cease offering net 

metering.

As of August 2014, two 

distribution utilities, Unitil

and National Grid, reached 

their 3% private cap, when 

including 35 MW of capacity 

on National Grid’s waiting 

list. Senate Bill 2214 raised 

the public sector cap from 

3% to 5%, and the private 

sector cap from 3% to 4%. 

We project the state as a 

whole to reach the net 

metering cap around 2017. 

California is expected to 

reach its cap sometime in 

2017. Utilities must offer 

net metering until it 

reaches the program cap, 

or July 1, 2017, whichever 

is earlier. After that time 

the utility must offer a 

standard contract or tariff 

(which may include net 

energy metering).

Delaware caps net 

metering at 5% of a utility’s 

aggregated customer 

monthly demand during a 

calendar year. Although 

the interpretation of 

“aggregated customer 

monthly demand” is 

unclear, we use a 

conservative interpretation, 

examining the percent of 

peak demand. 

New York may reach its 

program cap in 2017. Given 

that the NY-Sun initiative is 

expected to install 3 GW of 

solar, the New York PSC 

noted that “We recognize that 

the current three percent (3%) 

cap most recently set by the 

Commission will not be 

sufficient to support the 

significantly expanded energy 

capacity goals of NY-Sun...” 

(NY PSC 2014).

CALIFORNIA NEW JERSEY

Recent Efforts Expanding 

Net Metering Program Caps 

• Vermont passed H 702, increasing the net 

metering program cap from 4% of retail sales to 

15% of retail sales. 

• Massachusetts passed Senate Bill 2214, 

increasing net metering caps from 3% for both 

the private and public sector to 4% for the 

private sector and 5% for the public sector. 

Case Study: Hawaii’s Program Cap 

Evolution

• Hawaii has placed restrictions on the 

availability of net metering and 

makes the determination based on 

penetrations at individual circuits. 

• The initial cap was established in 2006 as 0.5% of system-wide 

peak demand. In 2011, the system-wide cap was removed, and a 

distribution level cap of 15% of circuit peak demand was 

established for circuits of 12 kV or lower. Utilities can analyze the 

circuit to determine if the limit can be increased. 

* Before 2014 legislative changes

** After 2014 legislative changes

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