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Incentives/Policies for Renewables & Efficiency

Printable Version
Net Metering   

Last DSIRE Review: 12/12/2014
Program Overview:
State: Colorado
Incentive Type: Net Metering
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Wind, Biomass, Hydroelectric, Geothermal Electric, Small Hydroelectric, Fuel Cells using Renewable Fuels
Applicable Sectors: Commercial, Industrial, Residential, Nonprofit, Schools, Local Government, State Government, Multi-Family Residential, Low-Income Residential, Institutional
Applicable Utilities:All utilities (except municipal utilities with less than 5,000 customers)
System Capacity Limit:IOU customers: 120% of the customer's average annual consumption.
Municipality and co-op customers: 25 kW for non-residential; 10 kW for residential.
Aggregate Capacity Limit:No limit specified
Community solar gardens: 6 MW/yr for 2011-2013; set by PUC thereafter
Net Excess Generation:Credited to customer's next bill at retail rate. After 12-month cycle, IOU customers may opt to roll over credit indefinitely or to receive payment at IOU's average hourly incremental cost. Municipality and co-ops provide annual reconciliation at a rate they deem appropriate.
REC Ownership:Customer owns RECs
Meter Aggregation:Allowed for IOU customers
Community solar gardens are allowed
Authority 1:
C.R.S. 40-2-124
Authority 2:
Date Enacted:
Date Effective:
C.R.S. 40-2-127
Authority 3:
C.R.S. 40-9.5-118
Authority 4:
Date Enacted:
Date Effective:
4 CCR 723-3, Rules 3664 and 3665

Note: In March 2014, the Public Utilities Commission opened a miscellaneous proceeding (14M-0235E) to consider issues of retail renewable distributed generation and net metering. Details will be posted once a final order is issued.

Eligibility and Availability

In December 2005 the Colorado Public Utilities Commission (PUC) adopted standards for net metering and interconnection, as required by Amendment 37, a renewable energy ballot initiative approved by Colorado voters in November 2004.

Customer-generators are eligible for net metering in Colorado for retail renewable distributed generation. The following sections describe the rules that apply to investor-owned utilities (IOUs), with last section detailing net metering for municipal utilities and electric cooperatives. All utilities subject to the below net metering rules are required to provide net metering service at non-discriminatory rates to customer-generators.

Systems sized up to 120% of the customer's annual average consumption that generate electricity using qualifying renewable energy resources are eligible for net metering in IOU service territories.

If a customer-generator does not own a single bi-directional meter, then the utility must provide one free of charge. Systems over 10 kilowatts (kW) in capacity require a second meter to measure the output for the counting of renewable energy credits (RECs).

Net Excess Generation

Any customer's net excess generation (NEG) in a given month is applied as a kilowatt-hour (kWh) credit to the customer's next bill, with each kWh credit of NEG off-setting 1 kWh of electricity consumption in a future month. If in a calendar year a customer's generation exceeds consumption, or if the customer-generator terminates its retail service, the utility must reimburse the customer for the NEG at the utility's average hourly incremental cost over the most recent calendar year.

Net metering customers may make a one-time election in writing on or before the end of the calendar year to have their NEG carried forward from month-to-month indefinitely. If the customer chooses this option, they will surrender all their kWh credits when they terminate service with their utility. 

Renewable Energy Credits

The customer-generator retains ownership of any RECs associated with the energy generated by the customer-generator’s system. A utility may acquire the RECs by purchasing them from the customer-generator through a standard offer. All contracts for RECs for solar electric technologies located on site at customer facilities are required to have a minimum term of 20 years if the system is under 100 kW.

Community Solar Gardens

In 2010 Colorado enacted the Community Solar Gardens Act, allowing for the creation of "community solar gardens" (CSGs) with a nameplate capacity of up to 2 megawatts in the service territory of IOUs (see H.B. 1342). A solar garden is a solar electric array with multiple subscribers connected to the utility grid.

A CSG may be owned by the utility itself or any other for-profit or nonprofit entity or organization and must have at least 10 subscribers. The subscribers may purchase a portion of the power produced by the array up to 40% and receive kWh credits on their utility bills in proportion to the size of their subscription. CSG subscriptions must be for at least 1 kW (unless owned by a low-income CSG subscriber) and a supply no more than 120% of the subscriber’s annual electricity consumption.

Subscribers must be located in the same municipality or county in which the community solar garden is located. If, however, the subscriber lives in a county with a population fewer than 20,000, the subscriber may subscribe to a community solar garden in an adjacent county that has a population fewer than 20,000, provided the same utility serves the site of the CSG and the property being offset by the subscriber's subscription.

If, in a monthly billing period, the CSG subscriber’s billing credit associated with a CSG subscription exceeds the customer’s bill from the IOU, the excess billing credit will be rolled over as a credit from month-to-month indefinitely until the customer terminates service with the IOU, at which time any remaining billing credits expire.

For compliance years 2011-2013, IOUs were only required to purchase up to 6 MW of new CSGs. For compliance years 2014 and thereafter, the PUC will set minimum and maximum purchases of renewable energy and RECs from new CSGs of different segments based on the capacity of the CSGs. Beginning in the 2015 compliance year, IOUs plan for acquisition of renewable energy from CSGs will be part of its renewable portfolio standard compliance plan. At least 5% of an IOU’s purchases from CSGs must be reserved for low-income CSG subscribers.

Meter Aggregation

A single customer with multiple meters located on contiguous property may elect to have their generator offset the load measured at more than one meter, a policy commonly referred to as “meter aggregation.” A customer who wants to aggregate their meters under net metering must give the utility a 30-day notice and specify the order in which they want their kWh credits applied to the multiple meters. All affected meters must be on the same rate schedule.

Municipal Utilities and Electric Cooperatives

Colorado enacted legislation in March 2008 requiring municipal utilities with more than 5,000 customers and all electric cooperatives to offer net metering for residential systems up to 10 kW and commercial and industrial systems up to 25 kW (see H.B. 1160). Electric cooperatives and municipal utilities are authorized to exceed these minimum size standards.

Any customer's NEG in a given month is applied as a kWh credit to the customer's next bill, with each kWh credit of NEG off-setting 1 kWh of electricity consumption in a future month. Electric cooperatives and municipal utilities are required to pay for any remaining NEG at the end of an annual period based on a "rate deemed appropriate” by the electric cooperative or municipal utility.

  Bill Dalton
Colorado Public Utilities Commission
1560 Broadway, Suite 250
Denver, CO 80202
Phone: (303) 894-2908
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

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