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Incentives/Policies for Renewables & Efficiency

Printable Version
Net Metering   

Last DSIRE Review: 09/26/2012
Program Overview:
State: Colorado
Incentive Type: Net Metering
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Wind, Biomass, Hydroelectric, Geothermal Electric, Recycled Energy*, Small Hydroelectric, Fuel Cells using Renewable Fuels
Applicable Sectors: Commercial, Industrial, Residential
Applicable Utilities:All utilities (except certain small municipal utilities)
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
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 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
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, Rule 3664, 3665

Senate Bill 51 of April 2009 made several changes, effective September 1, 2009, to the state's net metering rules for investor-owned utilities (IOUs), as they apply to solar-electric systems. These changes include converting the maximum system size for solar-electric systems from two megawatts (MW) to 120% of the annual consumption of the site; redefining a site to include all contiguous property owned by the customer; and allowing system owners to make a one-time decision to have their annual net excess generation carried forward as a credit from month to month indefinitely, rather than being paid annually at the average hourly incremental cost for that year. The Colorado Public Utilities Commission (PUC) incorporated these changes in the final rules adopted in September 2009. While SB 51 explicitly addressed solar-electric systems, the final rules pertain to all eligible energy resources listed above*.

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. Municipal and cooperative utilities are subject to lesser capacity-based maximums as described below. Electricity generated at a customer's site can be applied toward meeting a utility’s renewable-generation requirement under Colorado's renewable portfolio standard (RPS), though the renewable electricity certificates remain with the net metering customer unless purchased by the utility.

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. If in a calendar year a customer's generation exceeds consumption, the utility must reimburse the customer for the excess generation at the utility's average hourly incremental cost for the prior 12-month period. Net metering customers of an IOU 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 if and when they terminate service with their utility.

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). Customers accepting IOU incentive payments must surrender all renewable energy credits (RECs) for the next 20 years. Cooperative and municipal utilities are free to develop their own incentive programs at their discretion but they are not subject to the solar-specific requirements of the RPS.

Community Solar Gardens and Meter Aggregation
House Bill 1342 of 2010 allows for the creation of "community solar gardens" with a nameplate capacity of up to 2 MW in the service territory of IOUs. A community solar garden may be owned by the utility itself or any other for-profit or nonprofit entity or organization, and must have at least 10 subscribers. Subscribers will receive kWh credits on their utility bills in proportion to the size of their subscription. 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 less than 25,000, they may subscribe to a community solar garden in an adjacent county provided the same utility serves the site of the community solar garden and the property being offset by the subscriber's subscription. The PUC adopted rules to implement these new provisions in January 2012.

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. This is commonly referred to as meter aggregation. A customer who wants to aggregate their meters under net metering must give the utility at least 30 days notice, and must specify the order in which they want their kilowatt-hour credits applied to the multiple meters. All affected meters must be on the same rate schedule.

Municipal and Cooperative Utilities
House Bill 1160, enacted in March 2008, requires municipal utilities with more than 5,000 customers and all cooperative utilities to offer net-metering. The law allows residential systems up to 10 kW in capacity and commercial and industrial systems up to 25 kW to be credited monthly at the retail rate for any net excess generation their systems produce. Co-ops and municipal utilities are authorized to exceed these minimum size standards. The statute also requires the utilities to pay for any remaining NEG at the end of an annual period but does not define what the annual period is, nor the rate at which it will be paid. The law says the utilities will make a payment based on a "rate deemed appropriate by the utility". The new law also required the PUC to open a new rulemaking to determine if the existing interconnection standards adopted in 4 CCR 723-3, Rule 3665 should be modified for co-ops. Municipal utilities are required to adopt rules “functionally similar” to the existing PUC rules, but may reduce or waive any of the insurance requirements.

* The rules established by the PUC for the IOUs reference "retail renewable distributed generation" as being eligible for net metering. By definition, this excludes recycled energy projects. However, the sections of the state statutes that require co-ops and munis to offer net metering reference "eligible energy resources," a term which includes retail renewable distributed generation and recycled energy. By definition, this includes recycled energy projects, subject to the system capacity limit adopted by the 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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